Worldwide CNC market plateaus
The Computer Numerical Controls (CNC) market experienced robust growth in 2011. After the market suffered as a result of the financial crisis, culminating in a trough in 2009, the market has rebounded to exceed its previous peak of over $6 billion in 2008. This growth cycle in 2010 and 2011 was led by the recovery in machining for the automotive and oil and gas industries, and also by the continued rapid growth in Asia Pacific.
“The Computer Numerical Control market in 2011 reflects a recovery in manufacturing investment, but with many investment cycles coming to an end, the future remains very uncertain,” according to Research Director Sal Spada and Research Analyst David Lavieri, the principal authors of ARC’s “Computer Numerical Controls Worldwide Outlook” market research study.
Capital Investment Cycle
During the recessionary period in 2009 and the first half of 2010, companies conserved scarce capital by redeploying aging machines instead of purchasing new machines. Starting in late 2010, this trend began to reverse, as companies loosened their purse strings to invest in their operations and replace old machinery. In particular, automotive manufacturers strongly invested in new CNC control machines. These investments are typically cyclical, and there remains a question if these investments will sustain the CNC market over the next few years.
Multi-tasking Machines Regain Attention
Though multi-tasking machines have existed for a number of years, the technology has continued to gain traction as a growing application for CNC controls. Offering simultaneous operation of various applications (milling, turning, grinding, etc.), multi-tasking machines is the natural extension of the machining center. Not only do these machines decrease the total number of machines necessary, but also the total production time. Like the machining center, it reduces set-up and transfer times and improves cycle time. Due to the need for fewer machines, it also reduces the factory’s overall energy costs, as it saves on costly auxiliary equipment and coolants.
Uncertain Future for China
Though China continued to be a major growth market in 2011 for CNC controls, future growth in the region is less certain. As a result of its dominantly export-oriented economy, the country’s domestic market for machine tools is highly dependent on the economies of the developed world, particularly the United States, Europe, and Japan; these economies have struggled and demand declined sharply in the recession, causing inventories of Chinese manufactured products to skyrocket, and tempering the demand for future machine demand.
ARC Advisory Group