Cutting Tool and Machine Tool Accessory Manufacturing in the US Industry Market Research Report Now Available from IBISWorld
Los Angeles, California (PRWEB) September 24, 2013 -- Businesses must be sharp in order to make it in the Cutting Tool and Machine Tool Accessory Manufacturing industry. Demand is spread across several downstream markets, domestically and abroad, so revenue tends to follow downstream production levels. “High production encourages sales of new and replacement cutting tools and accessories, but reduced production stalls industry demand,” says IBISWorld Industry Analyst Olawale Harrison. The latter situation has characterized the US manufacturing sector since 2008, and industry firms have experienced adverse effects. Revenue is expected to fall at an average annual rate of 1.1% to total $5.3 billion during the five years to 2013.
Prior to 2008, available credit resulted in high consumer spending and favorable demand conditions, increasing manufacturing activity in the automobile, construction, mining, oil and gas machinery-manufacturing markets. Likewise, greater consumer spending allowed businesses to reinvest their earnings in capital expenditures such as milling machines and customized solutions for increasing production efficiencies. In 2009, financial conditions soured due to the recession and greatly affected the industry. Credit lines were frozen, consumer spending plummeted and businesses began downsizing to salvage profit in the face of revenue declines. These negative economic conditions reduced demand for machined parts at tool and die businesses, while demand for custom work fell.
However, despite these negative conditions, industry profit has improved. The firms that survived the recession did so by adopting lean production techniques. In light of low sales and high input prices, costs had to be cut in the form of employment and related wage costs. According to Harrison, “Firms that failed to do so exited the industry, but surviving operators' newfound efficiencies helped industry profit grow.” After suffering losses due to the financial crisis in late 2008, IBISWorld expects industry revenue to recover 3.6% in 2013 as a result of steady export demand and improving domestic production. Exports have been a successful venture throughout the recession, growing marginally due to strong demand from downstream manufacturing in newly industrialized countries. As such, exports will likely continue growing through 2018. Likewise, recovering conditions in the US manufacturing sector will help industry revenue grow during the period.
The Cutting Tool and Machine Tool Accessory Manufacturing industry is characterized by a large number of small operators. In 2013, IBISWorld estimates that over 75% of all industry establishments employ fewer than 20 people. Because of their niche manufacturing focus on cutting tool machinery and accessory manufacturing, these firms lack the capacity to garner a significant amount of the industry's potential US market share. Instead, firms work locally or regionally to supply various downstream manufacturers with new tools, replacement parts and periodic service and repair of existing machinery. Concentration is forecast to increase as larger companies seek to widen their industrial scope or bolster existing holdings by acquiring small but potentially complementary businesses in this industry.
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IBISWorld industry Report Key Topics
This industry primarily manufactures metal-cutting and metal-forming machine tools, accessories and attachments. Firms may also provide custom fabrication and repair work on a contract basis.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., http://www.ibisworld.com, +1 (310) 866-5042, [email protected]
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