Japan machine tool orders nearly unchanged in 2024
This is the second consecutive year that orders fell below JPY1.5t.
The Japan Machine Tool Builders’ Association (JMTBA) reported machine tool's total order value of JPY1.48t in 2024, a slight decrease of 0.1% from the previous year.
Although this marks the second consecutive year that orders have fallen below JPY1.5t, it still ranks as the eighth highest total in history.
Domestic demand has faced challenges due to a prolonged market adjustment, as expected recoveries in investments related to semiconductors and the automotive sector did not occur.
In contrast, foreign demand remained stable, with China indicating signs of recovery and North America keeping steady order levels, helping total orders stay close to last year’s figures.
Orders for numerical control (NC) machine tools reached JPY1.46t, down 0.1% year-on-year, and accounted for 98.4% of the total machine tool orders, exceeding 98% for the ninth consecutive year. Notably, the proportion of foreign orders surpassed 70% for the first time, increasing by 2.4 percentage points to 70.3%.
Domestic orders declined for the second year in a row, dropping 7.4% year-on-year to JPY441.5b. This marks the second consecutive year that domestic orders fell below JPY500b and the first instance in four years that they have dipped below JPY450b.
Expectations for a rebound in electric vehicle (EV) and semiconductor-related investments did not come to fruition, prolonging the market adjustment that began in the latter half of 2023 and is expected to continue through 2024.
Amongst the four major industries, only the Aircraft, Shipbuilding & Transportation Machinery sector experienced growth. Both the Industrial Machinery and Automotive sectors recorded results below JPY200b and JPY100b, respectively, for the first time in four years. Additionally, other industries faced difficulties, with significant declines such as in Other Manufacturing (-17.8% YoY, JPY18.8b) and Electrical Machinery (-13.1% YoY, JPY31.5b).
Meanwhile, foreign orders rose for the first time in two years, increasing by 3.4% year-on-year to JPY1.04t. This marks the fourth consecutive year that foreign orders exceeded JPY1t, ranking as the third highest level ever recorded.
Despite a downturn in the European market, China's recovery and consistent demand in North America helped maintain foreign orders at an average monthly figure of JPY87b.
Asia saw a notable recovery, exceeding JPY500b for the first time in two years, achieving the fourth highest total in history.
Key market figures include:
- China: JPY337.1b (+23.0%)
- South Korea: JPY29.6b (+18.3%)
- Taiwan: JPY22.3b (+10.2%)
- India: JPY64.2b (+25.6%)
China’s recovery has been bolstered by government subsidies aimed at alleviating economic concerns after the real estate downturn. High order volumes, driven by the EV and IT sectors, led to the fourth largest annual order volume in China's history.
India has also emerged as a significant growth factor, achieving a record total for the second consecutive year as IT-related investments expanded in the latter half of the year. Vietnam similarly experienced increased IT-related investments, with total orders for "Other Asia" surpassing JPY120b for the first time in six years.
In contrast, Europe faced a sharp contraction, with total orders declining by 19.1% year-on-year to JPY188.9b. Every European market reported downturns due to geopolitical risks, energy challenges, and rising interest rates.
North America experienced a second consecutive year of decline, with orders dropping 4.5% year-on-year to JPY306.2b. Nevertheless, it remained above JPY300b for the third consecutive year, ranking as the fourth highest level historically.
The US automotive sector has remained weak; however, stability was supported by the Industrial Machinery and Electrical & Precision Machinery sectors. Large orders from the aerospace industry boosted the Aircraft, Shipbuilding & Transportation Machinery sector, making it the second largest category for US orders.
Canada saw its first decline in four years but still reached its second-highest level on record. Meanwhile, Mexico recorded continued expansion for the fourth straight year, with orders increasing across all major sectors except Industrial Machinery.
