The global economy has affected Japan’s machine tool orders in August 2019 to hit the lowest record in several months. The big chains revealed negative figures of exports while many companies invested more, hoping to cope with the slowdown.

Japan Machine Tool Builders' Association (JMTBA) revealed that Japanese machine tool orders for August 2019 closed at 88.3 billion yen, down 37.1% from the previous year, the lowest in 76 months since April 2013, as a result of the harsher trade war, causing a lot of concerns for the industrial sector and the economy. JMTBA reported that the reduction in orders was a reversal effect after the government had injected some supporting funds last year. The economic slowdown also caused the manufacturers to be reluctant to invest, especially to order new machines. It is the second time this year that the orders are less than 90 billion yen.

Global Economy: Main Factor to Machine Tools Orders

Orders from outside Japan in the same month closed at 50.9 billion yen, down 34.6% from the previous year. The leading companies in the industry, including Toshiba Machinery, Okuma, and Tsugami, have expressed that the number of orders in the past are the result of the acceleration of 5G investment in China and other investments in Southeast Asia.

Invest for the Future 

Many machine manufacturers are already preparing for this situation, for example, Fanuc has scheduled a production that will support nanometer production to meet the needs of precision part molds. Okuma is in the process of bringing new technology to develop products and has plans to install the production lines of lathe and grinder parts at the headquarter factory in 2020. Amada Holdings has scheduled to open a production line of laser cutters in the United States by 2023 and expand their production lines in the western of United States in the future.
Developing current products of the company is another way to prepare for the situation, for example, Yamazaki Mazak has implemented artificial intelligence (AI) and CNC while DMG Mori has plans to develop an AI for controlling machines to handle changes in temperature, humidity and heat from production. In the small scale, there is an additional investment from the machine tools industry and other industries.