Global Overview of the Machinery Industry

October 2021

The briefing examines how the machinery industry is performing globally and in the largest countries in terms of machinery output. The report also provides data for production, market size, imports, exports, industry costs, industry profitability and number of companies. The industry and market overview provide benchmarks against other countries in the region.

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Key Findings

Rising demand for innovative products

The rising focus on digital transformation in the agriculture, manufacturing and construction industries is leading to new product development across machinery manufacturers. New machinery products featuring the latest technology and advanced features help boost productivity, cut operating costs and reduce environmental impact.

Smart manufacturing

Industry 4.0 is revolutionising the way companies manufacture and distribute their products. New technology adoption helps machinery producers improve supply chain management, rearrange their industrial processes in more flexible and client-orientated ways, and enhance operational efficiency.

Improving supply chain resilience

Due to growing operational risks, the companies in the industry are expected to build more resilient supply chains through diversification and localisation. Machinery manufacturers are anticipated to diversify their supplier base instead of relying on a single supplier. In addition, greater localisation of supply chains helps reduce logistical costs, lessen environmental impact and ensure less disruption in product distribution.

Product-as-a-service business model

Machinery manufacturers are anticipated to focus increasingly on value-added services in order to maintain a stable revenue stream and differentiate themselves. The product-as-a-service model helps establish long-term partnerships with customers, acquire insights into customer needs and achieve synergies in product development and innovation.

Introduction

Scope
Examining four trends shaping the machinery industry
COVID-19: Impact on machinery
Machinery industry to experience rapid recovery from the COVID-19 pandemic
Production output to fully recover in 2021
China and the US remain the largest machinery producers globally
Machinery manufacturers recorded weak profit growth in recent years
Export growth slowed down due to weaker demand and COVID-19 pandemic
Rapidly expanding manufacturing base drive machinery imports growth in Asia Pacific
A sia Pacific was the only regional market which continued to expand over 2020
Deere & Co and Caterpillar Inc maintain leading positions
Total number of companies declined in most countries over 2020
Industry remains highly fragmented, but M&A activity is set to pick up in the coming years
Asia Pacific and Western Europe to drive industry growth over 2021-2025
India, France and Brazil are forecast to record a slow recovery from COVID-19 crisis
Key future trends shaping the global industry
China: Industry maintains steady growth despite the COVID-19 pandemic
The “dual circulation” economic development to boost industry growth
US: industry witnessed sharp decline in production output due to COVID-19 shock
Large-scale investments in infrastructure upgrade will fuel demand for machinery products
Germany: Industry revenue contracts during the COVID-19 pandemic
German producers to focus on supply chain localisation and digital transformation
Japan: Pandemic-related disruptions hinder machinery production
Export market to provide best growth opportunities
South Korea: Industry remains resilient during COVID-19 crisis
Smart manufacturing offers new growth frontiers
Italy: COVID-19 shock adversely affected machinery manufacturers in Italy
Higher spending on R&D could strongly benefit the industry’s recovery
India: Industry faces short-term turbulence due to COVID-19 pandemic
Post-pandemic public funding and returning FDI set to drag the industry out of crisis
France: Industry recorded double-digit decline in production output over 2020
Rising diversification in global supply chains set to benefit the industry
UK: COVID-19 had a negative impact on the country’s machinery makers
Infrastructure programmes needed to boost recovery
Canada: Industry experiences a short-term shock due to COVID-19
Manufacturing relocation to offer long-term benefits for local machinery producers
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