Machine-tool industry limiting growth in the motion control market

The machine-tool industry continues to be the largest sector for the global motion control market.

02/01/2013


IHS has acquired IMS ResearchThe machine-tool industry continues to be the largest sector for the global motion control market. Sales of general motion control (GMC) and computer-numerical control (CNC) products to the machine-tool sector were valued at $5.4 billion in 2011, almost 45% of all motion control revenues. The machine-tool industry grew strongly in 2010 and 2011, from which the motion control market benefited with revenue growth in excess of 20% in both of those years.

The situation changed in 2012, and weak demand in the machine-tool sector is now limiting sales of motion controls. Data published by machine-tool associations on the year-on-year performance of orders in 2012 showed a grim picture of the machine-tool market for the three largest producers: China, Japan, and Germany. At IMTS in September 2012, the CMTBA announced that machine-tool orders had decreased 30% in China. Through September, the German association VDW reported a decrease of 11% for orders, and the Japanese association JMTBA reported a 5.1% decrease for orders. In November, machine-tool orders declined for a seventh straight month in Japan, dropping below 90 million yen for the first time in 25 months.

The relationship between the performance of the machine-tool industry and motion control sales cannot be fully understood without taking into account the order backlogs and buying patterns of the machine builders (OEMs). Machine-tool associations also track machine-tool production, which has continued to grow in 2012 because of a large backlog of orders. Current backlogs exceed 8 months in Germany and 5 months in Japan. Since machine-tool builders are still increasing their production output, motion control sales to the machine-tool sector are forecast to have grown in 2012. However, with only 1.8% growth in EMEA and 1.4% in Japan, growth is constrained by a change in the buying patterns; OEMs have already reduced or postponed orders of motion control products in anticipation of the effect of falling 2012 orders for machine tools and thus a decline of production. Order backlogs continue to shrink, so machine-tool production in 2013 will feel the full impact of the lower 2012 order level. Sales of motion control products to the machine-tool sector are forecast to suffer even more in 2013, a decline of 0.2% being projected in the Japanese market and increase of only 0.2% projected in the EMEA market.

Unlike the motion-control markets in Japan and EMEA, the Asian motion-control market was hit severely in 2012. With a much shorter order backlog, declines in machine-tool shipments were reported in 2012 in China, the world’s largest producer and consumer of machine tools; sales of motion products to the machine-tool sector in Asia are projected to have declined over 17% in 2012. Both the machine-tool and the motion-control markets are expected to rebound in 2013, in part because of efforts from the Chinese Government, which aims to increase China’s machine-tool production significantly as part of the 12th Five-year Plan. Sales of motion control products to the machine-tool sector in Asia are forecast to grow by 7.4% in 2013.  

On the other hand, the Americas region is currently a bright spot for the motion control market. Machine-tool orders continued to grow in the US in 2012, and sales of motion-control products to the machine-tool sector are projected to have grown by 4.8% in 2012 and to grow by 3.5% in 2013. However, the machine-tool market in the Americas is much smaller than that of Europe, Asia or Japan. With the American market accounting for only 10% of the global sales of motion control products to the machine-tool sector in 2011, the positive effect from the American machine-tool industry is small compared to the negative effects from the industry in the other regions.

With the machine-tool industry currently failing to boost growth in the motion-control market like it did so well in 2010 and 2011, global motion-control sales will see only limited growth in 2012 and 2013. This is particularly true for CNC products, which are used primarily in machine-tool applications. In 2012, global sales of motion controls to the total industrial market are projected to have contracted by 1.9%. The outlook is better in 2013, when the Asian market is expected to recover; but revenue growth is forecast to remain less than 5% due the struggles in the markets in Japan and EMEA.