Gardner Intelligence Blog

In 2017 and 2018, the World Machine Tool Survey from Gardner Intelligence, the research arm of Modern Machine Shop publisher Gardner Business Media, showed that 12 out of the top 15 machine tool consuming countries increased their consumption. It is relatively rare for this to happen in a single year, and this was the only time it had ever happened in back-to-back years. This worldwide upturn and the extremely cyclical nature of the machine tool market should have been a clue to the fate of machine tool consumption in 2019, which was a worldwide downturn.

According to the latest survey, the results of which have recently been published, global machine tool consumption decreased by $13.1 billion, or 13.8%, to $82.1 billion in 2019. Therefore, 2019 had the lowest level of machine tool consumption since 2010, when much of the global economy was just starting to recover from the Great Recession. And, in an about-face of 2018, 12 out of the top 15 consuming countries decreased their machine tool consumption in 2019.

In Next Six Months, Manufacturers' Number One Priority Is Investing in Their Business

During the week of April 27th, Gardner Intelligence conducted a survey to understand how manufacturers are responding and will respond in the future to the effects of COVID-19 now that states are starting to open their economies. The survey focuses on two basic questions:

Manufacturers already began taking four critical actions to ensure their businesses could remain operational:

April’s reading of 34.2 signaled that overall business activity conditions continued to slow further after falling sharply in March.  As expected, April’s data also indicated that the disruption to supply chains reported last month also further worsened.  For a second month, new orders, production and exports activity led the Index lower.  These components are considered leading indicators of the Index due to their frequent influence on backlogs and employment readings in later months.

April’s activity contraction was widespread across the manufacturing sector.  Manufacturers of all sizes and serving all end-markets reported further slowing business activity.  The spread in the average index reading between firms under 20-employees and those over 250-employees over the last two-months was less than 1-point.  During typical downturns large firms have more options available to them to cope with the pain of a downturn; however, the current situation has left little -if any- room for firms of any size to maneuver to relatively greater safety.

Personal Income Unchanged in March

In March, real disposable income was $14,940 billion, which was its lowest level since May 2019. The one month rate of growth was just 0.1%, which was the slowest rate of growth since income contracted in December 2013. Surely, real disposable income will contract month-over-month in April.

The annual rate of growth decelerated to 2.4%, falling below 3% (historic average growth rate) for the fourth month in a row. Also, it was down from its peak rate of growth of 4.0% in December 2018 and the slowest rate of growth since August 2017. 

During the week of April 20th, Gardner Intelligence conducted a survey to gauge the effects of COVID-19 on discrete parts manufacturers across all the industries that Gardner Business Media covers. The survey focuses on two basic questions:

For each of those questions, respondents were asked to compare the current state of their business to the norm prior to COVID-19 and rank the severity of the change or adjustment from minimal to moderate to major. You can go here to view all the charts for the survey results.

Reports

Top Shops

‘Top Shops’ is a benchmarking and recognition program designed to help shops build their business.

World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

An annual survey that collects statistics regarding budgeted spending on machine tools, testing equipment, software and more.

Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.