Capital Equipment News January 2022

THOUGHT LEADERSHIP – MACHINERY PRODUCTION

Full recovery for global machinery production in 2021

In times of economic turmoil, the machinery manufacturing sector tends to be volatile. That’s because uncertain times make factory managers inclined to postpone investment in expensive new kit. With automotive production seizing up in 2020, the machine tools market shrunk by 18% and many other categories of machinery saw sales diminish to well below 2019 levels. By Adrian Lloyd , CEO of Interact Analysis.

Time to recover for materials handling equipment - top 10 regions

The materials handling equipment market is heading for a swift recovery.

B ut, in the case of the pandemic, the times have been so unusual, and the impacts so unpredictable, that sales in some machinery categories have grown strongly. In particu- lar, the boom in household electronics sales driven by locked down populations, coupled with the earlier than expected return to pro- duction of the automotive sector, saw sales in semiconductor and electronics machinery grow by 8% in 2020. Growth leaders Our research shows that the global machinery market was worth US$1,98- trillion in 2020. This constituted YoY growth of about -6%. But we expect to see a 6,2% rebound in 2021 up to US$2,11-trillion. Materials handling equipment is the largest segment, with a 2020 value of US$275- billion. Our forecasts for the total machinery sector out to 2025 put the three highest

CAGRs as mining machinery (5,3%), farming machinery (5,1%) and textile machinery (4,5%). Multi-industry machinery will have a CAGR of 3,8% over the forecast period, with materials handling equipment performing particularly well within that category (CAGR 4,7%), owing to the booming warehousing and logistics sectors. From a regional perspective, the global machinery sector is highly consolidated, with the top five regions accounting for over 70% of global market value. China alone accounts for over 40% of the world’s machinery production. In terms of CAGR out to 2025, the USA will lead the way with a CAGR of 4.9%, followed by Italy and India with CAGRs of 4% and 3,7% respectively. Materials handling Materials handling equipment can be split into four separate sub-groups: conveyors, which take up 30% of the market, escalators and lifts (30%), cranes and hoists (25%) and

forklifts and other industrial trucks (15%). The fortunes of the materials handling equipment (MHE) sector are closely linked to those of general industrial production. This means that, as the global recovery accelerates, MHE will see concurrent growth. And this growth will be from a relatively strong base, given that it saw modest contraction in 2020 of only -3,8%. The sector will see 6% growth in 2021. One of the motors behind this will be the drive for greater industrial automation. Another is the sector’s universality: MHE is used across a wide range of industrial sectors. Regionally, the biggest producers of MHE are China (43,6% in 2019), the United States (10,8%) and Japan (8,5%). We expect most of the top ten regions to recover by 2025. For example, the market in China grew by a modest 3% in 2020, and will see 6,2% growth in 2021. In contrast, the data shows that the worst performer on most MHE counts will be France. b

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