Expectations for the machine tool industry 2022-2023

The January-March 2022 Regional Economies Report, prepared by Banco de México, indicates that business executives in Mexico plan to make some type of investment in the next twelve months, and most frequently indicated the acquisition of machinery and equipment for production; transportation equipment; and computer equipment and peripherals.

In this matter, the results of CAINTRA's Economic Expectations Survey for July (the most recent at the time of writing this article) showed that the manufacturing industry continued to expand. And when asked if they made any investment in machinery, equip

ment, or construction, 36% of the companies surveyed answered yes. This figure was the highest for a month since 2021 and through the seventh month of 2022.

According to Luciano Diorio, General Manager of HI-TEC Group, in 2021 the metalworking sector, specifically the machine tool sector, almost recovered the levels it had in 2019.

He referred that it is key to accelerate access to technology for companies in the manufacturing sector, especially medium and small companies.

"It is important that all industry players understand the importance of adopting new technologies in order to be more productive and reduce costs.” Luciano Diorio.

Jorge Alberto Yarte Sada, Co-founding Vice-president of the Portuguese-Mexican Chamber of Commerce and Industry (CCILM) and President of the Mexico-Portugal Bilateral Business Committee, said that machine-tools is a sought-after sector in emerging industrial clusters (such as Mexico) by large industries.

"It has revealed a strong commitment of national companies that decide to invest in components for the most varied production practices," said the executive.

In this regard, Israel Serrano, the company's sales representative at ADV Technologies, commented that, although Mexico lags behind in technology compared to more industrialized countries, there are also companies in the country that are at the forefront of technology.

"There are quite a few companies in Mexico that have the highest level of technology. The most important thing is that we are advancing and growing. We as integrators see that the requirements of our customers are increasing," he said.

Serrano pointed out that, with more powerful machines and systems, the industry has greater efficiency in terms of time savings and higher productivity.

"Obviously, since these machines are more complex, they also require more engineering on the part of the people who operate them," he said.

For this reason, he explained that it is key to make a balance between the objective of each company and what needs to be invested in machinery and personnel as well as in processes.

"You can have the best machinery, the best talent, but if you don't have an efficient process as a company, it will be difficult to achieve your goals," he said.

Industry figures in Mexico

According to information from the Ministry of Economy, in 2021 the total trade exchange of Metalworking Machining Centers in Mexico (including exports and imports) was US$342 million, of which US$9.95 million corresponded to exports and US$332 million to imports.

The states with the highest imports of this equipment were Nuevo León with 61 million dollars, Querétaro with 56.9 million dollars, Guanajuato with 42.4 million dollars, Mexico City with 35.9 million dollars and the state of Mexico with 26.7 million dollars.

The main countries from which these machines were imported were Japan with 95.5 million dollars, Germany with 85.8 million dollars, the United States with 76.6 million dollars, South Korea with 23.4 million dollars and China with 11.5 million dollars.

Likewise, information from the Ministry of Economy refers that, in 2021, the total trade exchange of multi-station metalworking machines (including exports and imports) was 19 million dollars, of which 543 thousand dollars corresponded to exports and 18.4 million dollars to imports.

The states with the highest imports of these machines were Nuevo León with 7.62 million dollars, Querétaro with 1.9 million dollars and Estado de México with 1.63 million dollars.

The main countries from which this equipment was imported were Japan with 4.62 million dollars, Italy with 3.16 million dollars, China with 1.39 million dollars, Germany with 997 thousand dollars and Spain with 669 thousand dollars.

For its part, in 2021, the total trade exchange of lathes (including turning centers) that work by metal removal (including exports and imports) was 179 million dollars, of which 6.21 million dollars corresponded to exports and 173 million dollars to imports.

The states with the highest imports of these lathes were Nuevo León with 27.4 million dollars, Aguascalientes with 23.4 million dollars, Estado de México with 14.3 million dollars, Querétaro with 13.8 million dollars and San Luis Potosí with 13.6 million dollars.

The main countries from which this equipment was imported were Japan with 73.6 million dollars, Korea with 26.7 million dollars, the United States with 21.4 million dollars, China with 16.4 million dollars and Germany with 14.4 million dollars.

Regarding the total trade exchange of machines (including sliding table machining units) for drilling, reaming, milling or threading (including tapping), metal by stock removal, except lathes (including turning centers), the information from the Ministry of Economy refers that, in 2021, a figure of 64.4 million dollars was reached, of which 3.68 million dollars corresponded to exports and 60.7 million dollars to imports.

The states with the highest imports of these machines were Nuevo León with 8.45 million dollars, Guanajuato with 6.99 million dollars, Mexico City with 6.56 million dollars, Coahuila with 6.27 million dollars and Jalisco with 5.1 million dollars.

The main countries from which this equipment was imported were the United States with 13.6 million dollars, Germany with 12.8 million dollars, China with 11.7 million dollars, Japan with 6.38 million dollars and South Korea with 3.79 million dollars.

Regarding machine tools that operate by EDM, information from the Ministry of Economy refers that, in 2021, the total commercial exchange of this equipment was 17 million dollars, of which 464 thousand dollars corresponded to exports and 16.5 million dollars to imports.

The states with the highest imports of these machines were Querétaro with 3.97 million dollars, the State of Mexico with 3.2 million dollars, Nuevo León with 3.01 million dollars, Chihuahua with 1.52 million dollars and Baja California with 1.11 million dollars.

The main countries from which this equipment was imported were Taiwan with 3.43 million dollars, China with 3.32 million dollars, Japan with 2.42 million dollars, Thailand with 1.98 million dollars and Switzerland with 1.75 million dollars.

The international machine tool scenario

The European Association of Machine Tool Manufacturers (CECIMO) reports an increase in world machine tool production of close to 72.1 billion euros, reflecting an increase of around 19.7%.

Marcus Burton, chairman of CECIMO's Economic Committee, indicated that "despite an uncertain global market, Europe remains the world leader in machine tool production, which amounted to about €22.6 billion in 2021."

The German Association of Machine Tool Manufacturers (VDW), specifies that orders received by the German machine tool industry in the first quarter of 2022 increased by 44% over the same period last year.

For the president of the Spanish Association of Machine Tool, Accessories, Components and Tools Manufacturers (AFM Cluster), César Garbalena, 2021 was a year of recovery in turnover figures and, in particular, of intense order intake for machine tools.

He referred that in 2021 orders in machine tools advanced almost 30 % over 2019 figures (69.2 % with respect to 2020).

According to the most recent report - up to the time of writing this article - on new manufacturing technology orders in the United States, published by AMT, Association For Manufacturing Technology, in June 2022 this item reached a value of 417.5 million dollars.

It details that during the first half of 2022, manufacturing technology orders totaled $2.84 billion, which represented a 13% increase over the first half of 2021.

Douglas K. Woods, AMT’s President, noted that September orders in an IMTS year tend to exceed September orders in non-IMTS years by nearly $180 million. "In addition to the immediate 'September effect,' orders following an IMTS tend to remain elevated for the rest of the year."

He said supply chain issues continue to plague the industry, resulting in extended lead times for new equipment.

"Generally, metalworking shops with an order in hand need to start making parts and may not be able to wait for new machinery to be delivered. By making less complex parts, some of the demand that would normally go to new machinery is now redirected to the used equipment market," he said.

The requirements of a smart factory

According to a report from ReportLinker, technological advancements such as increased deployment of robotics and human-machine interaction are impacting market growth.

"The demand for real-time connectivity is driving the emergence of cloud-enabled smart factories," the report details.

It adds that sensors embedded in this equipment help optimize machine time and maintenance schedules.

"This information can be examined and used to increase productivity. In addition, sensors can help with predictive analytics and their lifecycle," the report states.