We continue to hear reports that the machining industry in China continues to expand at a high rate and many are just as optimistic for the future . The velocity of recovery has been so good that many industry experts are seeing demand outpace supply. Several factors are playing into this strong growth.
The China automobile industry continues to thrive, increasing to 18.5 million cars sold in 2011. Being that almost half of all machined products go to feed the car industry, it therefore is fueling a lot of the growth in the machining industry. Additionally, China has injected over 600 Billion dollars into the economy after the recession that has added further to the surge into China’s machining industry. Further, there appears to be a transfer of capital allocation from other uncertain investment areas such as real estate into the manufacturing sector.
Finally, as the economic crisis is subsiding throughout the world, international orders are back on the rebound. Many shops report that orders from the USA and other western countries have not come back as strong as they were pre-recession, but they are still on the rise. However, according to Jeff Sprinkle with Precise Manufacturing, a CNC precision machining company in Fort Wayne, Indiana, the machine industry has rebounded well in the US as well. Sprinkle states that many customers that were once looking to China to reduce costs have chosen to keep their production in America due to the higher quality, better customer service, lower ordering requirements and shortened lead time. However, many reports from machining factories in China report that many US customers have brought their business back to China, just not at the levels seen before the economic crisis. However, growth from developing countries has increasing significantly, causing the overall international market to be a considerable reason for the thriving machining industry in China.