Machine tool sales were up 13.9% in the fourth quarter, as the number of machine tools sold soared to the highest level in two years, according to industry data compiled by Bloomberg New Energy Finance.
Machine tool sales climbed 5.6% in January, a sign of momentum in the industry, said Jim Boulware, president of the Boulweares Group, a consultancy that tracks the U.S. industry.
Machine tool prices are down this year and it’s possible that demand will pick up, Boulvary said.
Machines made in China are still cheaper than in the U, he said.
Machine tools have also been a driver of job growth in other industries, such as auto and electronics manufacturing, he added.
While machine tools are seen as a cost-effective way to build factories, the technology is also being used in other fields, including healthcare and security.
The industry is “very sensitive to the supply chain,” Boulvy said.
The machine tools sector is expected to account for $1.6 trillion in sales this year, according the consultancy.
Machine makers, which include Hewlett Packard Co., IBM Corp., Intel Corp., and other manufacturers, are seeking to capture growing demand for their products in the world’s fastest-growing manufacturing sector, according a Bloomberg New Economy study.
The trend in machine tool sales, which are based on the percentage of sales that go to the manufacturer, is a bit different than that of computer and mobile devices, which account for about 70% of all machine tools sales, Bousil said.
“There’s a little bit more risk associated with machine tools,” he said, noting that the industry could suffer if the demand for machine tools is weak.
“Machine tools can help companies build a new product line or to expand existing products.
It’s a new way to produce things,” said John M. Hirsch, chief executive of the Tool and Die Industry Association.
But it could also be the next step for companies that have grown so fast that they’re not yet profitable, Hirsch said.
Boulware of the consultancy said the rise in machine tools could help drive growth for the machine-maker sector, which has lost $1 trillion in value over the past decade.
The industry is projected to see $8.5 trillion in global sales this decade, a 3.9-percent increase over the last decade, according TOB Financial.
The overall sales of the U of A’s university sector have grown 5.4% over the same period.
A strong sales boost in the machine tool sector could be a good indicator that a new wave of companies, led by China’s Xiaomi Inc., is ready to take over the industry from a foreign-owned one, said Chris McQuaid, a partner at the consulting firm Strategy Analytics.
He added that some companies are taking advantage of the demand in China to develop products.
“A lot of the new companies are going to be trying to build their business in China because they’re so desperate for capital,” McQuaeld said.