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Orders for metal cutting machinery for the year ending December 2015 were down by 10% year over year but by considerably more when you take into the account the price inflation caused by the declining value of the Canadian Dollar which has dropped 17.5% over the same time span. The major contributing factor has been the dramatic drop in orders from Western Canada due to the declining value of oil. Eastern Canada saw an increase in orders of 8.4% while Western Canada had a precipitous drop of 66.5% year over year. The chart below shows the moving average of orders for east and west and the two combined.

Orders for fabricating machinery held up well in comparison with orders for CNC machines up by 19% in spite of a
drop in units of 5%. Orders for manual machines were up by 7% in both units and values

Average order size for CNC metal cutting machinery YTD were as follows: horizontal lathes, $191,017, vertical
spindle lathes, $206,692, multitasking lathes, $353,976, VMC up to 40” travel, $158,673, VMC above 40” travel,
$262,613, VMC five or more axis, $586,023, horizontal machining centers, $401,564, horizontal machining centers
5axis, $1,529,208, milling machines , $20,135, horizontal and vertical boring machines, $680,448, wire EDM,
$227,510, sinker EDM, $256,625, grinders, $340,611, CMM, $151,189, saws, $57,333, others, $246,500. Average
order size for manual metal cutting machines was $19,613.

Average order size for CNC fabricating machinery were: press brakes, $167,312, shears, $49,854, turret punches,
$497,292, profile cutting laser, $722,054, profile cutting plasma, $189,714, profile cutting water jet, $144,718, tube
benders, $67,647, others, $160,000.

Average order size for manual fabricating machinery was $12,684 and for presses and equipment was $34,625.

Worldwide demand for machine tools is projected to climb 5.5 percent per year through 2019 to $181 billion.
Gains at the global level will be largely driven by market growth in China and other developing nations, where demand
for durable goods is expected to post the strongest increases. This will result in additional investment in new
manufacturing capacity and related machine tools in the Asia/Pacific region, the Africa/Mideast region, Eastern
Europe, and Central and South America. China alone is expected to account for more than two-fifths of all new
product demand through 2019. These and other trends are presented in World Machine Tools, a new study from
Freedonia Group, a Cleveland-based industry research firm.

Through 2019, machine tool demand in Western Europe, the second largest regional market worldwide, is
expected to grow nearly six percent per annum. Growth will be in line with the average worldwide pace, and
Western Europe will account for 18 percent of product demand gains through 2019. Market conditions in numerous
regional countries are expected to improve as both overall economic growth and gross fixed investment accelerate.
Analyst Gleb Mytko notes, “Growth will also be supported by the introduction of more expensive machine tools.” In
order to develop the next generation of durable goods, manufacturers in the region will invest in machine tools that
offer increased control and precision. In Japan, the world’s fourth largest national market behind China, the US, and
Germany, demand for machine tools is expected to rebound after several years of losses. Because many Japanese
durable goods firms delayed making machine tool purchases in recent years, there is significant pent-up demand in
the country.

North America is projected to see machine tool demand decline nearly one percent per year through 2019, due solely to weakness in the large US market result. In contrast, Mexico will continue to experience rapid advances in machine advances in machine tool sales, while the Canadian market is expected to grow at about the world average pace. Many durable goods companies in North America modernized existing facilities, built new plants, and purchased additional machine tools in recent years. As a result, there will be less new and replacement product demand in the region during the 2014-2019 period.

© 2016 by The Freedonia Group, Inc.
World Machine Tools (published 01/2016, 447 pages) is available for $6300 from Freedonia Group. For
further details or to arrange an interview with the analyst, please contact Corinne Gangloff by phone
440.684.9600 or e-mail pr@freedoniagroup.com. Information may also be obtained through
www.freedoniagroup.com.

APPRENTICE BURSARY WINNERS & HONORABLE MENTIONS
Back Row (L-R):
Attila Simon, Answer Precision (Honorable Mention)
Ken Moynahan, Anchor Danly – Tilbury (Honorable Mention)
Nicholas Docimo, Micrometric Ltd. (Honorable Mention)
Scott Forrest – Eagle Press & Equipment
(Apprentice Bursary Recipient)
Front Row (L-R):
Kevin Finlay, Robust Gear & Industries Inc. (Pre-Apprentice Bursary Recipient)
Jared-Sean Farewell, Anchor Danly – Cambridge (Apprentice Bursary Recipient)
Duane Pennings, Armo-Tool Ltd. (Apprentice Bursary Recipient)
Brent Rankin, JFK Systems Inc. (Pre-Apprentice Bursary Recipient)
Missing:
Jon Prashek, J&C Tool & Die Ltd. (Apprentice Bursary Recipient)