Basic Facts

Size: px

Start display at page:

Download "Basic Facts"

Cori Knight
5 years ago
Views:

1 The Manufacturing Technologies Association Basic Facts

Introduction to Manufacturing Technologies Manufacturing technology is vital for the creation of all modern products, either directly or at some point in the manufacturing process.

2 Introduction to Manufacturing Technologies Manufacturing technology is vital for the creation of all modern products, either directly or at some point in the manufacturing process. Machine tools and the directly associated cutting tools and work-holding equipment are used across engineering (including aerospace, automotive, defence, railways, medical equipment, construction equipment, agricultural machinery, oil & gas, and consumer durables) and indirectly by almost every part of the manufacturing sector. Other aspects of manufacturing technology such as metrology (measuring) equipment and computer aided design and manufacturing systems (CAD/CAM) combine with the machines, tooling and work-holding equipment to make up complete systems that are used to make products that are part of our daily lives, making the sector fundamental to the nation's economy, despite its relatively small size. DEFINITION OF MACHINE TOOLS A metalworking machine tool is a power driven machine, not portable by hand when in operation, which works metal by cutting, forming, physico-chemical (or non-contact) machining (e.g. lasers or electrical erosion machines), or a combination of these techniques. Modern machine tools are controlled by sophisticated computers and these are referred to as CNC (computer numerically controlled) machine tools. LOCATION & EMPLOYMENT Machine tool manufacturers are located across the UK, with concentrations in the Midlands and West Yorkshire. Companies in the cutting tool sector are mainly based in the West Midlands and around Sheffield, but again, there is wide geographical spread. We estimate that the manufacturing technology sector in the UK employs about 10,000 people across both the manufacturing and distribution parts of the sector. THE UK MANUFACTURING TECHNOLOGY SECTOR We estimate that turnover for the manufacturing technology sector in the UK in was about 1.9 billion, of which over 3 /4 is exported. Data on the output of machine tools, cutting tools and tool/work-holding equipment gives a total of around 970 million, of which about 70% was exported. We have some new estimates for the metrology sector, although the product classifications are quite broad and may include some items that are not strictly in scope; this gives an estimate that output of metrology equipment is worth in the region of 640 million, with a direct export ratio of about 85%. Estimates for other aspects of the manufacturing technology industry such as software is even more problematic, but we estimate output to be worth around 250 million. THE UK MANUFACTURING TECHNOLOGY MARKET As MTA represents both manufacturers and importers, the size of the UK market is also relevant. Estimates of the UK market can be made using the formula production minus exports plus imports. As the data tables for machine tools, cutting tools and tool/work-holding equipment show, there was a trade deficit of 182 million for the UK, but we estimate that there was a surplus of 310 million for metrology products (although the situation here is also confused by indirect exports and imports of equipment which is fitted to machinery when it is traded). After making an allowance for other aspects of the sector, we estimate that the UK market for manufacturing technology equipment is about 1.7 billion

3 BUSINESS CYCLE MACHINE TOOL EXPORTS/IMPORTS OTHER MANUFACTURING TECHNOLOGY SECTORS WORLD STANDING The customers of the manufacturing technology suppliers are concentrated, although not exclusively, in the automotive, aerospace and other transport equipment, metal goods and machinery sectors. This means that those who supply capital goods (i.e. machine tools and some aspects of the metrology industry) suffer more than most from cycles of demand in the economy. Being dependent on investment (see table 12) means that confidence, finance and capacity utilisation are the principal drivers of demand, with indicators of investment intentions also important to the outlook. In addition, there is often a time lag between the cycles for demand and investment, as well as one between orders and shipments within the industry. This makes large parts of the manufacturing technology sector highly cyclical and, therefore, significant percentage changes in business from year to year are common, even under normal business conditions. Demand for cutting tools and some other consumable items within the sector are more closely related to the output levels of the user industries, although investment also influences overall demand for these products. In, exports of machine tools were worth million, an increase of +3.5% compared to ; deliveries to European Union increased by +2%, while shipments outside this region grew by +5%. Trade by country within the European Union can be distorted by the way the data is collected, so the country analysis is only valid outside of that area. Most significant of these trends was the fall of -22% in exports to the USA, although this was mostly a reversal of an increase in and the level in was still higher than. The European Union accounted for 48% of the UK s machine tool exports in. Overall, imports of machine tools into the UK were broadly flat in (-0.1%); this is the combination of a small increase in arrivals from the European Union of +3.5% and a fall from the rest of the world of -3.9% compared to. As a result, the share of machine tools arriving from the rest of the EU increased slightly to 54%, the highest share since The rest of the world data contains a mix of trends, perhaps the most notable of which were the increase of +33% in imports from Taiwan and a fall of -35% in arrivals of machines from Japan.. It is worth noting that among our major trading partners for machine tools, the UK recorded a trade surplus vis-à-vis China, India and the USA, but deficits against the European Union, Switzerland, Japan, Taiwan and South Korea. For the other elements of the manufacturing technology sector which we cover in Basic Facts, a similar analysis is available for cutting tools and tool/work-holding equipment where we have data on the sector. Production data for is not yet available all of the production data for has been estimated. For cutting tools (see tables 5, 7 & 8), the trade deficit widened again in with imports rising to million (up by 27.2 million or +12%) while exports increased to million (+15%, but only an increase of 20.2 million). There was a shift in the pattern of the export markets with significant increases in shipments to both the USA and Germany taking them above the Netherlands (which saw a sharp fall); there was no change in the pattern for imports, although only Germany the top source saw a significant increase compared to. For tool/work-holding equipment (see tables 6, 10 & 11) we saw a reversal of the trading position with a surplus being recorded for the first time since Exports increased to 82.2 million, the highest level since 2013, led by a significant increase in shipments to the USA which more than doubled compared to ; meanwhile, imports in this category fell back to 73.7 million, just below the level. Metrology equipment is not as clearly defined as some of the other aspects of the manufacturing technology sector, but there are four categories of equipment which cover these products. Total metrology exports increased by 3.5% in to 782 million which matches the figure and is the joint highest level since we started tracking this group in On the same basis, imports of metrology products (which includes parts & accessories) fell by -7.2% to 471 million. At this stage, we don t have a geographical breakdown of this trade. In, the UK machine tool industry moved up to 16th in the world league table for production, according to figures compiled by Gardner Intelligence, a division of Gardner Business Media, although all of these rankings are heavily affected by changes in exchange rates. The UK is 14th in the league table of exporters, is the 13th largest importer and the 15th largest machine tool market in the world. China remains, by far, the world s largest machine tool market, followed by the USA, Germany and Japan, with Italy and South Korea vying for 5th place. Data on the UK s position in the world is not available for any of the other sectors of manufacturing technology apart from machine tools

4 TRENDS FOR MANUFACTURING TECHNOLOGY IN THE UK TABLE 1 TRENDS FOR MACHINE TOOLS IN THE UK (Values in million at current prices) The following tables give an overview of the key statistics relating to the manufacturing technology sector. They cover machine tools, cutting tools and work/tool holding equipment. We have now included data about the metrology sector in our opening statements (see page 3), but other aspects of manufacturing technology such as CAD/CAM systems are not well defined in official statistics, making it impossible to compile meaningful data. For machine tools (see table 1), evidence from our own surveys (which cannot be used to replace the National Statistics because they measure different factors) suggests that there are a range of reasons why the export ratio is 100% or more from 2008 to 2011: Output data may be under recorded (this is impossible to estimate); Machines manufactured abroad, imported into the UK and then re-exported (possibly with some completion work) don't appear in the production data; estimates suggest this was worth million per annum over this period, but has fallen recently; Exports of second-hand goods (which cannot be identified from new machines) don t, of course, appear in the production figures; A significant proportion of exports are identified as low value items and at least some of these may be second-hand equipment (see above); for example, in 2013, this was worth 57 million (or 11% of the total value of exports). In the tables for exports and imports, care is needed in identifying trade with countries which are members of the European Union. This data is measured on a country of destination (exports) or dispatch (imports) basis and, coupled with the presence of extensive warehousing operations in countries such as Belgium and the Netherlands, can lead to a distortion in the true partner country. Data on production is collected by the Office for National Statistics (ONS) under the PRODCOM system; the most recent year for which data has been published is. Data on exports and imports is collected by HM Revenue & Customs (HMRC). Both of these systems are product based, which hinders calculations of the size of those parts of the sector where meaningful classifications are not available. YEAR SALES OF EXPORTS AS A % OF IMPORTS AS A % OF IMPLIED CRUDE TRADE UK GOODS PRODUCTION CONSUMPTION CONSUMPTION BALANCE % * % * % * % * % * % * % * % * % % % % % % % % % % e % e % e 611 e -86 Sources: Office for National Statistics, HM Revenue & Customs and MTA calculations Estimates (e) are shown in italics (and see introduction text) * see introduction text Sales of UK Goods are for principal products of the metalworking machine tool industry manufactured in the UK. This excludes parts and accessories and is grossed-up to account for small firms not sampled by the survey

5 TABLE 2 LEADING EXPORT MARKETS FOR MACHINE TOOLS - (by country of destination, values in million at current prices) TABLE 3 LEADING IMPORT SOURCES FOR MACHINE TOOLS - (by country of origin, values in million at current prices) All Countries European Union Belgium China U S A Germany Irish Republic India Spain South Africa U A E Mexico 8.3 All Countries European Union U S A Belgium China Germany Hungary Irish Republic India France Mexico Spain 11.5 All Countries European Union Belgium U S A China Germany Irish Republic France India Mexico Hungary Iran 8.7 All Countries European Union Germany Japan Taiwan U S A China South Korea Belgium Italy France Switzerland 22.4 All Countries European Union Germany Japan U S A Belgium Taiwan China Italy Switzerland South Korea France 20.9 All Countries European Union Germany U S A Taiwan Japan Belgium China Italy South Korea Switzerland France 23.7 Source: HM Revenue & Customs via Figures include export of new and used machines. Source: HM Revenue & Customs via Figures include import of new and used machines. Import figures from countries of the European Union based on data on country of consignment

6 TABLE 4A UK EXPORTS OF MACHINE TOOLS BY PRODUCT TYPE IN TABLE 4B UK IMPORTS OF MACHINE TOOLS BY PRODUCT TYPE IN UK MACHINE TOOL EXPORTS by product type, ( million) UK MACHINE TOOL IMPORTS by product type, ( million) Physico-Chemical % Machining Centres % Lathes % Milling, Drilling and Boring - 7.1% Grinding and Finishing % Other Metal Cutting - 4.3% Bending - 4.9% Presses % Other Metal Forming - 6.5% Physico-Chemical % Machining Centres % Lathes % Milling, Drilling and Boring % Grinding and Finishing - 4.6% Other Metal Cutting - 4.5% Bending - 6.2% Presses - 4.8% Other Metal Forming - 8.2% Source: HM Revenue & Customs via calculated by MTA. Source: HM Revenue & Customs via calculated by MTA

7 TABLE 5 TRENDS FOR CUTTING TOOLS IN THE UK (Values in million at current prices) TABLE 6 TRENDS FOR TOOL/WORK-HOLDING EQUIPMENT IN THE UK (Values in million at current prices) YEAR SALES OF EXPORTS AS A % OF IMPORTS AS A % OF IMPLIED CRUDE TRADE UK GOODS PRODUCTION CONSUMPTION CONSUMPTION BALANCE % % % % % % % % % % % % % % % % % % e % e % e 277 e -104 YEAR SALES OF EXPORTS AS A % OF IMPORTS AS A % OF IMPLIED CRUDE TRADE UK GOODS PRODUCTION CONSUMPTION CONSUMPTION BALANCE % 76 44% % 47 33% % 60 31% % % % 98 35% % 99 37% % % % 74 32% % 81 31% e 82 30% e 74 28% e 264 e +9 Sources: Office for National Statistics, HM Revenue & Customs and MTA calculations Estimates (e) are shown in italics (and see introduction text) Sales of UK Goods are for products manufactured in the UK. This is grossed-up to account for small firms not sampled by the survey. For details of cutting tools see table 10. Sources: Office for National Statistics, HM Revenue & Customs and MTA calculations Estimates (e) are shown in italics (and see introduction text) Sales of UK Goods are for products manufactured in the UK. This excludes parts and accessories and is grossed-up to account for small firms not sampled by the survey

8 TABLE 7 LEADING EXPORT MARKETS FOR CUTTING TOOLS - (by country of destination, values in million at current prices) TABLE 8 LEADING IMPORT SOURCES FOR CUTTING TOOLS - (by country of origin, values in million) All Countries European Union 83.4 All Countries European Union 81.0 All Countries European Union All Countries European Union All Countries European Union All Countries European Union Netherlands U S A Germany Irish Republic France Netherlands U S A Germany Irish Republic Italy U S A Germany Netherlands Italy Irish Republic Germany China Netherlands Belgium U S A Germany Netherlands China Belgium U S A Germany Netherlands China Belgium U S A 22.8 Source: HM Revenue & Customs via Figures include export of new and used equipment. Source: HM Revenue & Customs via Figures include import of new and used equipment. Import figures from countries of the European Union based on data on country of consignment

TABLE 9A UK EXPORTS OF CUTTING TOOLS BY PRODUCT TYPE IN TABLE 9B UK IMPORTS OF CUTTING TOOLS BY PRODUCT TYPE IN UK CUTTING TOOL EXPORTS by product type, ( 151.

2% Other Tools - 19.7% Knives & Cutting Blades - 5.0% Unmounted Tool Tips, etc - 29.2% Saw Blades - 15.8% Turning Tools - 1.2% Tapping/Threading Tools - 4.0% Drilling Tools - 21.

9 TABLE 9A UK EXPORTS OF CUTTING TOOLS BY PRODUCT TYPE IN TABLE 9B UK IMPORTS OF CUTTING TOOLS BY PRODUCT TYPE IN UK CUTTING TOOL EXPORTS by product type, ( million) UK CUTTING TOOL IMPORTS by product type, ( million) Saw Blades % Turning Tools - 2.3% Taping/Threading Tools - 3.1% Drilling Tools - 9.3% Milling Tools - 9.2% Other Tools % Knives & Cutting Blades - 5.0% Unmounted Tool Tips, etc % Saw Blades % Turning Tools - 1.2% Tapping/Threading Tools - 4.0% Drilling Tools % Milling Tools % Other Tools - 9.0% Knives & Cutting Blades - 2.7% Unmounted Tool Tips, etc % Source: HM Revenue & Customs via calculated by MTA. Source: HM Revenue & Customs via calculated by MTA

10 TABLE 10 LEADING EXPORT MARKETS FOR TOOL / WORK-HOLDING EQUIPMENT - (by country of destination, values in million at current prices) TABLE 11 LEADING IMPORT SOURCES FOR TOOL/ WORK-HOLDING EQUIPMENT - (by country of origin, values in million) All Countries 66.8 European Union 18.9 All Countries 61.0 European Union 21.3 All Countries 82.2 European Union 26.7 All Countries 74.3 European Union 38.4 All Countries 81.3 European Union 37.0 All Countries 73.7 European Union U S A Saudi Arabia China Germany Spain U S A China Germany Spain Italy U S A China Germany France Saudi Arabia Germany U S A Japan Belgium Netherlands U S A Germany Japan Belgium Netherlands Germany U S A Japan Belgium Netherlands 4.7 Source: HM Revenue & Customs via Figures include export of new and used equipment. Source: HM Revenue & Customs via Figures include import of new and used equipment. Import figures from countries of the European Union based on data on country of consignment

11 TABLE 12 UK MANUFACTURING INVESTMENT TABLE 13 COMPARISON OF INVESTMENT RATIOS (in billion, at prices, including leased assets) Billions Total Fixed Investment as a share of GDP, % 55 Brazil India China Italy France Japan Spain Turkey United Kingdom Germany South Korea United States Source: Office for National Statistics, Statistical Bulletin (series DS4E) Source: Oxford Economics 20 21

12 TABLE 14 OUTPUT BY INDUSTRY SECTOR THE MANUFACTURING TECHNOLOGIES ASSOCIATION 140 Index = Q Q Q Q Q Q Q Q3 Metal Products Automotive 2012 Q Q Q Q Q Q3 Source: Office for National Statistics Note: We believe that the data for the machinery industry in January 2013 and January (as highlighted with dotted lines) represents unrealistic trends in the published figures Machinery Aerospace Q1 Q3 Q1 Q3 Q1 Q3 The MTA exists to promote the interests, and be the voice, of the manufacturing technologies sector in the UK. The Manufacturing Technologies Association is the UK s trade association for companies in the manufacturing technology sector. MTA members design, manufacture and supply the advanced machinery, equipment and intellectual property that enable the creation of the products we rely on from day to day and that drive our economy. Key aspects of manufacturing technology include; machine tools, cutting tools, metrology (measuring) equipment, additive manufacturing (3D printing), surface finishing, robotics and computer aided design and manufacturing products (CAD/CAM), as well as the technology which is enabling the digitalisation of manufacturing the fourth industrial revolution. These combine to make up complete systems increasingly automated and adaptive - that manufacturers deploy, making the sector fundamental to the prosperity, health and defence of the nation. The MTA delivers: marketing support and networking opportunities; specific and relevant economic and technical information; representation to Government and other stakeholders; help for exporters; and support for learning and development within member companies and beyond. The MTA owns and runs MACH, the UK s premier event to showcase manufacturing technologies. The biennial exhibition, held at the NEC, attracts over 25,000 visitors, some 600 exhibitors and the last edition, MACH, saw over 150,000,000 of business attributed to it. Established in 1919 the MTA has been at the core of the UK s engineering based manufacturing economy for almost a century. 23

13 The Manufacturing Technologies Association The Manufacturing Technologies Association 62 Bayswater Road London W2 3PS T: +44 (0) F: +44 (0) E:

Regional Trade Statistics Third Quarter 2011

Regional Trade Statistics Third Quarter 2011 Coverage: United Kingdom Theme: Business and Energy Released: 08 December 2011 Next Release: 08 March 2012 Frequency of release: Quarterly Media contact: HMRC