The machine sector was one of the hardest hit by the economic downturn, but according to a recent report from IMS Research (www.imsresearch.com), worldwide machinery production is set to eclipse its previous record, set in 2008. Machinery production will see record growth this year, with worldwide aggregate revenues showing a better than 10% rise, IMS Research reported, and the trend will likely continue through at least 2014.
"The latest indicators are that growth is slowing slightly from the highs seen last year—hardly surprising when you consider the magnitude of the bounce back seen in 2010—but there still appears to be solid growth on last year," said Andrew Robertson, market analyst for IMS Research.
When considered on a regional basis, however, the recovery story is a varied one, Robertson noted. Output from Asia-Pacific declined in 2009, but not to the extent that it did in Europe and the Americas. Although Japan's output plunged in 2009, China and India continued to see growth. With Japan's tremendous growth in 2010, Asia-Pacific comfortably surpassed its 2008 levels last year, and looks set to continue its strong performance, IMS Research detailed.
The decline in 2009 was more severe in the Americas, and the subsequent recovery was more gradual. Nonetheless, 2011 is predicted to be a record year for machinery production there as well.
The 2009 downturn was most severe in Europe. Although Germany's upturn has been fairly strong, other countries such as Spain, Greece and Portugal have continued to struggle. IMS Research does not expect machinery production in Europe to surpass pre-recession levels until after next year.
Illustrating differences in the dips and recoveries, the figure details the three countries that have traditionally dominated the machinery sector. Machinery production in the U.S. and Germany is expected to recover and set new levels this year and next, but Japan is still not expected to reach its 2007 peak within the forecast period of the report. Even with growth in 2010 of almost 40%, production is still not expected to recover to pre-recession levels before 2015.
"Although no industry is immune from the effects of the current economic uncertainty, machinery output, for the time being at least, appears to be faring better than the markets and economy in general," Robertson said. "Whether it will continue to do so is yet to be seen."
Machinery Production to Surpass Highs
IMS Research, July '11