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Sector focus: The UK Machine Tools Marketplace
30 Mar 2008
Machine tools have been at the heart of UK innovation since the industrial revolution; they are truly the mother machines – the machines that build machines and are used to create almost everything around us that is made from metal, plastics, polymers, composites and ceramics.
Without their continuous development we wouldn’t have the everyday things we need - let alone what we want – at a price anyone other than the super rich could afford; they are truly enabling machines using enabling technologies. But you know all this already. And you probably think we don’t have much of a machine tool industry in the UK any more. It’s certainly not what it used to be forty years ago, but there are still more than 370 companies in the UK making and supplying machine tools and hundreds more making and supplying the equipment, such as toolholding, workholding, cutting tools, and so on, that they use.
In April of this year the MACH 2008 exhibition at Birmingham’s NEC will showcase nearly 500 companies which supply the world with machine tools and the equipment and services which form the basis of our engineering manufacturing industry in the UK. Current industrial processes include an ever increasing range of technologies such as metrology, software, drives and controls and so on, not to mention new, advanced materials which need to be cut, formed and shaped – all vital to UK manufacturing, many new to industry and on show for the first time.
Machine tool manufacturers in the UK have seen pretty good times over the past few years in particular: with a gross profit margin of around 18%, operating profit margins of 7% and returns on equity of around 20%, it’s an industry which has seen considerable investment.
The figures for 2007 are soon to be released, but it’s looking as if 2007 was even better than 2006 and 2005, when there was a 4th successive increase in the value of exports of machine tools from the UK. However, unlike previous years when this growth was generated by an increase in deliveries to the European Union, in 2006 the ROW exports were nearly 25% higher than in the previous year. In particular, there were large increases to the USA (+31%), India (+23%) and Japan (+76%).
Also in 2006, there was a large increase in imports, reflecting the strength of the UK market. The trend for imports was the opposite of that for exports, with arrivals from the EU increasing more rapidly than those from elsewhere. Germany accounted for just over one-quarter of all imports (measured by value) in 2006.
In 2007, the UK machine tool industry is estimated to have been 13th in the world league table for production, according to figures compiled by Gardner Publications Inc. (Metalworking Insiders’ Report) with a value of around £340 million (composed 76% cutting, 24% forming machinery).
The UK remains in 9th place in the league table of exporters; exporting £460 million last year, importing £570 million making the UK the 16th largest market for machine tools in the world with an overall value of £470 million for the machine tools alone.
As you’ll see at the MACH 2008 exhibition, investing in the machine tools industry in the UK is an investment in innovation – an investment in a wealth-creating industry with a fantastic heritage.
Images for this article - click to enlarge
All images copyright © Mercator Media 2008
