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Machinery industry comprises companies that operate by manufacturing, producing and supplying of various kinds of machinery used in agriculture, mining, construction, or manufacturing. The demand for machinery depends on overall industrial activity and on the health of sectors such as agriculture, construction, manufacturing, oil and gas exploration and production, and power generation. The profitability of individual companies depends on engineering expertise and efficient production. Large companies have economies of scale in purchasing.

Small companies can compete effectively by specializing. The US industry, which is fragmented overall, includes numerous segments that are concentrated. Major products are farm and construction machinery, metalworking and other manufacturing machinery, and commercial refrigeration equipment, and general-use machinery such as engines and pumps. While some products, such as tractors or heaters, are finished products, others, like motors, are components used in further production, and some, like textile looms, are custom-designed for a particular manufacturing process.Ìý

Machinery Industry Trends

The Industrial Machinery Manufacturing industry encompasses a wide variety of products, including ball bearings, industrial furnaces, sporting equipment and water filtration systems. The industry relies on the performance of its downstream markets, including mining, construction and other manufacturing industries. Other manufacturers use about three-quarters of the products made by the Industrial Machinery Manufacturing industry. The industry is highly fragmented and is characterized by a large number of players operating in different segments. Products in each segment tend to be highly homogenized and thus operators tend to compete based on price rather than on product quality. Industry revenue is projected to rise by 1.1% in 2013-14 to $2.1 billion by the end of 2015. The industry is concentrated on the eastern seaboard, with 80.0% of establishments situated in Victoria, New South Wales and Queensland.

These states are traditional manufacturing hubs, with large skilled working populations and proximity to infrastructure, services and customers. Being situated close to a skilled labor force, suppliers and customers assists in minimizing labor shortages, downtime and transport costs, and maximizing customer contact and service. Being in close proximity to other manufacturers - the major downstream market for the industry - is also of key importance. Outside of the eastern seaboard, Western Australia is the next largest hub for industry activity, accounting for 10.8% of industry locations. WA firms tend to service clients in the mining division. According to the US National Association of Manufacturers, the US represents more than a fifth of the global manufacturing industry, with China producing 15% and Japan 12% of manufactured products. The US manufacturing industry’s output is in excess of $1.5 trillion worth of products, more than 11% of the country’s gross domestic product. The industry represents close to 19 million US jobs, and employs almost 10% of the country’s workforce.

Major Machinery Industry Players

Major players in the machinery industry include Applied Materials, Baker Hughes, Caterpillar, Deere, divisions of General Electric, Kennametal, Canon, Fiat Industrial, Guangxi LiuGong Machinery, Mitsubishi Heavy Industries, Sandvik, and Tetra Laval International.