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China Leads Machinery Production Growth

ControlDesign.com
08/30/2010

Despite the world recession, China still grew its machinery production in 2009, according to a new report from IMS Research (www.imsresearch.com). Although it dipped from the incredible growth rates of the preceding years, Chinese output still grew, while almost every other country experienced steep declines.

Growth in China is predicted to increase in 2010 from the 2009 level, but not at the 20% growth seen the previous year. Continued growing domestic demand, with higher levels of disposable income and large government investment, underpins this return to stronger growth in machinery production, explained Andrew Robertson, research analyst at IMS.

Of the major industrial nations, the U.S. is expected to be among the strongest in terms of growth in 2010. The U.S. was one of the first into the downturn and subsequently one of the earlier nations to return to growth. The recovery in the automobile industry, which benefited from large government stimulus packages, is helping drive growth in machinery production revenues in 2010, according to the report.

Germany, the leading European producer of machinery, suffered badly as its exports declined throughout the economic downturn. Recovery in Europe started slightly later than in the U.S. and is tempered by concerns in several countries about vast sovereign debt and the effects of austerity programs to address it, explained Robertson. Growth in Germany is being primarily driven by and depending on a recovery in exports, which are benefiting from a weak euro.

Likewise, Japan’s machinery production also relies heavily on exports and suffered badly from the trade drop-off in 2009. As with the other countries considered, only limited growth in 2010 is predicted, according to IMS. The Japanese machinery sector benefited from government incentives; however, these recently ended. In addition, a strong yen is adversely affecting the competitiveness of Japan’s exports.

Machinery revenue growth
Because the U.S. was one of the first countries to
enter the downturn, it should be one of the earlier
nations to return to growth.
IMS Research