President’s Message.

More than five years into the” Canadian recovery” most of us expected healthy growth – while the pessimists between us are already looking for signs of the next recession. But in the aftermath of the last financial crisis, the pace of recovery is much slower than forecasted at the beginning of the year. The uncertainty that continues in Europe, in the emerging economies and even within the United States, have combined to produce an economic environment in which demand for Canadian exports are sub-par. That is why the collective wisdom of economists and financial strategists can be summarized to a few words:
“Until there is a healthy and sustained recovery in the global economy, Canadian investments and exports will continue to disappoint.”

The Bank of Canada latest reports confirm a sluggish economy – economic growth of only 1.2% annualized for the first half of 2014. This disappointing economic performance will most likely compel the Bank of Canada to keep its present benchmark interest rate at 1% (at least for the second half of 2014).
In such uneasy circumstances the Gardner Business Media Report: “2014 World Machine Tool Output and Consumption Survey” has forecasted that the overall worldwide machine tool consumption will grow 6.2% in 2014 (over 2013) – to a total value of US$58,3B.
Consumption (C) of machine tools of a certain country (or world area) is calculated by adding imports (I) to production (P) and subtracting exports (E): C=I+P-E.

The Gardner’s Survey forecasts consumption growth by world region as follows:
           North America: 8.3%.
           Europe: 7.2%.
           Asia: 4.1%.
           South America: 2.8%.

The 25 top consuming and producing countries of machine tools account for roughly 95% of all consumption and production. The first five “biggies” (largest consuming machine tools countries in 2014) are forecasted as follows:
           China: stationary at $11.4B.
           USA: growth of 15% to $9.3B.
           Germany: growth of 12% to $7.9B.
           South Korea: growth of 13% to $5.1B.
           Japan: growth of 6% to $4.5B.

The 2014 Gardner forecast was created using the three most important leading indicators of machine tools consumption: money supply, capacity utilization and manufacturing production. Interesting to note that PRODUCTION of machine tools is always higher than CONSUMPTION – the difference is the amount of INVENTORY held by machine tool builders and their distributors.

And how did Canada perform at the half year mark of 2014, compared with same period of 2013?
As per CMTDA data, machine tools orders as of June 30, 2014 were as follows:
            - CNC Metal Cutting Machines: up 5% for units, up 14% for value.
            - Non CNC Metal Cutting Machines: down 6% for units, up 13% for value.
            - CNC Metal Forming Machines: up 3% for units, up 4% for value.
            - Non CNC Metal Forming Machines: down 3% for units, same value.
            - Stamping and Forming Presses: down 3% for units, up 3% for value.
As historically the second half of the year is always stronger than the first half, the projected forecast for the complete year of 2014 looks good for our industry.
In addition, the largest North American machine tool show, (IMTS), usually a harbinger of increased sales activity, is just around the corner: September 8 to 13, incl. (McCormick Place, Chicago, IL.).