Frost & Sullivan: APAC increases production investment
As a result of thi...
With middle-class consumer purchasing on the rise Manufacturers are investing in new production facilities to meet escalated demand.
As a result of this increase of production plants and machines, there has been an drive in a requirement for machine tools. An analysis by Frost & Sullivan predicts that this will push the machine tool market in Asia-Pacific to grow at a compound annual growth rate (CAGR) of 2.2% between 2018 and 2023, reaching US$10bn in revenue.
"Business expansion strategies and plant localisation of end-user industries are set to drive the growth of the machine tool industry in the APAC region," commented Divya Saiprasad, Principal Consultant, Industrials at Frost & Sullivan. "The rise in demand for machine tools can be attributed to the increase in the production of auto components and growth of the automotive industry."
Frost & Sullivan expects Japan, South Korea and Taiwan to remain the top three markets for machine tools in the APAC region, contributing 69.5% in 2023. While economies such as Vietnam, Indonesia and Thailand are predicted to show strong growth in the next three years, as a result of foreign direct investment (FDI).
"On the end-user vertical front, engineering and automotive sectors are projected to remain dominant," commented Saiprasad. "The aviation sector is also expected to further supplement the market for machine tools, given the demand from the burgeoning upper-middle-class population."
How can machine tool vendors tap into further growth?
Integrating new features and technologies to increase the efficiency of multi-task tools
Harnessing IoT and Big Data for preventive and predictive maintenance
Developing smart machines equipped with AI, robots, and software technologies
Increasing production efficiency, shortening delivery times, and maintaining price competitiveness
Expanding sales, distribution, and aftermarket service channels
For more information on manufacturing topics - please take a look at the latest edition of Manufacturing Global.
Image source: Frost & Sullivan
IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.