We are pleased to announce the publication of our updated forecasts for the UK Machine Tool and Cutting Tool market and the release of the Spring edition of the Global Machine Tool Forecast.
Our forecasts for the UK market last Autumn got pretty close to the actual trend for 2020 - these turned out to be -24.7% for machine tools and -23.6% for cutting tools. However, the combination of continued uncertainty from the Covid-19 outbreak (especially in our key overseas markets), the still somewhat unknown longer-term impacts on UK competitiveness from Brexit, an extended period of weakness in the aerospace market and, on the upside, the super-deduction boost for investment, has meant revisions to the predictions for 2021 and 2022.
Despite similar starts to 2021, all this has generated a different pattern between the two markets that we forecast; we think that the investment led demand for machine tools will take a little longer to recover than output (which drives the tooling forecast) and is also affected by the time lag between orders and sales. Therefore, we now expect growth of around +6% in the UK machine tool market this year, accelerating to +14% in 2022. In parallel, we expect cutting tool demand to react more quickly to the improved market conditions and register growth of +8% in 2021 which then slows slightly to +6% next year.
There are, as usual, a number of twists and turns to these forecasts; a good example is the customer industry profile where we are balancing the continued weakness in the aerospace industry against what appears to be a relatively good recovery for the automotive industry, although the latter is likely to take a dip in the very short-term as a result of the global micro-chip shortage and the continued impact on demand (mainly in Europe) from the reimposed lockdowns.
The Spring edition of the Global Machine Tool Forecast, as usual, covers 26 countries with background for 9 user industries. This, of course, has the added complication of covering the different situation in these countries but, in short summary chapters, it brings together the key issues affecting the forecast. This report also has a section looking at the key risk scenarios which are currently mainly based around progress (or the lack of it in some cases) of the Coronavirus vaccination programme around the world. There is also a special section looking at the more medium-term implications for the machine tool market from the increasing trend for electric vehicles of various types.
As this service is an important member benefit, we have not included the reports as an attachment to this Friday Brief article; however, you can download them from the members area of the MTA web-site at https://www.mta.org.uk/members-area/mta-forecast-documents (you will need your login and password - if you are having problems with this, let us know and we can help sort out your login).
Finally in this section, a reminder about our Spring Economic Update Webinar on Wednesday 28th April (at 1100). Based mainly on our new forecasts, we will give an overview of the macro-economic situation, take a look at the industrial background to these forecasts and summarise our new and updated forecasts. If you have not already registered for this free MTA Members only event, you can do so at https://www.mta.org.uk/event/spring-economic-update-0.