In the first quarter, China's machine tool industry still operates at a low level.

Abstract A few days ago, the China Machine Tool Industry Association released its analysis report on the economic performance of the machine tool industry in the first quarter of 2014. The report highlighted that the sector was operating under “low pressure” during this period. Several factors, including declining market demand, fierce competition from foreign brands, rising production costs, and a persistently low level of activity, have contributed to a worsening operational environment. As a result, the overall quality of operations has declined, with businesses facing greater challenges and limited growth potential.

According to data from the National Bureau of Statistics for January to March 2014, the industry's main business revenue reached 185.5 billion yuan, representing an 11.7% year-on-year increase. However, key financial indicators such as the profit margin on main business revenue (5.3%), the ratio of accounts receivable to main business revenue (46.8%), and the debt-to-asset ratio (53.9%) suggest ongoing financial strain. Meanwhile, fixed asset investments in user industries like automotive, internal combustion engines, and construction machinery—key drivers for the machine tool sector—slowed down or even turned negative, adding to the pressure on the industry.

Data from key enterprises within the China Machine Tool Industry Association further revealed a downward trend in performance during the first quarter. A significant portion of companies reported sales revenue and product sales declines of over 50% compared to the previous year. Additionally, 50.7% of enterprises experienced a rise in finished goods inventory, while another 50.7% saw a drop in total profits. Market demand remained weak, with both new orders and existing order backlogs showing negative growth. The sector continued to face high losses, and overall profitability remained under pressure.

In terms of international trade, the first quarter saw a “drop, then recovery and stabilization” pattern. Total machine tool and tool imports and exports amounted to $6.05 billion, a slight decrease of 1.13% year-on-year. However, export volumes began to recover due to the depreciation of the RMB and improved economic conditions in major international markets. Key export categories included cutting tools, abrasives, and metal-cutting machines. The top two export destinations remained the United States and Japan, while Vietnam overtook Germany to become the third-largest market. On the import side, the decline continued due to reduced fixed asset investment, slower development in user industries, and increased localization of foreign brands. The top three sources of imports were Japan, Germany, and Taiwan.

Looking ahead, the report warned that the industry faces considerable downward pressure due to macroeconomic policies and weak market demand. Internal growth drivers remain insufficient, leading to continued low-level fluctuations across sub-sectors.

Finally, the report recommended strengthening industry monitoring, coordinating economic and trade policy development, improving the financial environment, and optimizing financial investment management to support long-term stability and sustainable growth.