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Machinery

Eric Forden
(202) 205-3235
Eric.Forden@usitc.gov

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Change in 2017 from 2016:

  • U.S. total machinery exports: Increased by $7.8 billion (6.1 percent) to $135.9 billion
  • U.S. general machinery imports: Increased by $16.9 billion (9.4 percent) to $196.4 billion

U.S. total exports of machinery rose by $7.8 billion (6.1 percent) in 2017 to $135.9 billion, with some of the largest product-group increases driven by higher global investment in semiconductor manufacturing and by strong demand for farm and garden equipment, particularly tractors. The export markets that accounted for the largest increases in exports were South Korea (up $3 billion or 57 percent), Japan (up $1.4 billion, 37 percent), and Canada (up $844 million, 4.1 percent) (table MT.1). 

Table MT.1: Machinery: U.S. exports and general imports, by selected trading partners, 2013–17

 
Million $
 
Item
2013
2014
2015
2016
2017
Absolute change,
2016–17
Percent
change,
2016–17
U.S. exports of domestic merchandise:
 
 
 
 
 
 
 
    China
9,107
9,600
9,485
8,975
9,698
722
8.0
    Mexico
16,466
18,254
17,997
16,983
17,499
516
3.0
    Canada
24,805
25,865
23,344
20,594
21,438
844
4.1
    Japan
3,406
3,825
4,306
3,749
5,137
1,388
37.0
    Germany
3,990
3,874
3,935
3,912
4,340
428
10.9
    South Korea
5,602
6,510
5,919
5,309
8,338
3,028
57.0
    Taiwan
4,694
4,289
4,873
5,258
4,685
-574
-10.9
    Italy
1,088
1,047
1,104
962
1,089
127
13.3
    United Kingdom
3,050
3,652
3,445
3,385
3,503
118
3.5
    Netherlands
1,913
2,157
2,128
2,067
2,253
187
9.0
    All other
48,306
48,261
43,356
37,491
37,059
-432
-1.2
        Total domestic exports
122,428
127,333
119,893
108,685
115,038
6,353
5.8
Foreign exports
17,188
18,647
18,872
19,412
20,907
1,495
7.7
Total U.S. exports (domestic and foreign)
139,616
145,981
138,765
128,097
135,945
7,848
6.1
U.S. general imports:
 
 
 
 
 
 
 
    China
44,345
48,144
50,524
48,427
53,018
4,591
9.5
    Mexico
26,357
29,054
30,098
29,918
31,408
1,490
5.0
    Canada
13,592
13,696
12,918
12,164
13,535
1,371
11.3
    Japan
18,911
18,827
17,376
17,321
18,718
1,397
8.1
    Germany
16,543
17,882
17,671
17,291
19,099
1,808
10.5
    South Korea
6,635
7,110
7,579
7,068
7,895
828
11.7
    Taiwan
4,006
4,389
4,442
4,124
4,617
493
11.9
    Italy
6,315
7,215
7,040
6,805
7,572
767
11.3
    United Kingdom
3,998
4,239
4,129
3,732
3,835
103
2.8
    Netherlands
2,405
4,277
2,906
2,485
3,234
749
30.1
    All other
27,120
30,697
31,202
30,202
33,483
3,281
10.9
        Total general imports
170,227
185,529
185,884
179,537
196,414
16,878
9.4

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. The countries shown are those with the largest total U.S. trade (U.S. general imports plus U.S. domestic exports) in these products in the current year.

U.S. general imports increased by $16.9 billion (9.4 percent) in 2017 to $196.4 billion, with import growth spread widely across product types: imports increased in 26 of 31 machinery product groups. Overall, import growth reflected growing domestic demand fostered by increases in U.S. consumer spending, business investment, and residential and nonresidential construction. The countries that accounted for the largest increases in U.S. imports were China (up $4.6 billion, 9.5 percent), Germany (up $1.8 billion, 10.5 percent), and Mexico (up $1.5 billion, 5 percent).

U.S. Exports[1]

U.S. domestic exports of machinery substantially increased in two product groups: semiconductor manufacturing equipment (up $4.7 billion, 28.4 percent) and farm and garden machinery and equipment (up $1.1 billion, 13.2 percent).

South Korea, Taiwan, China, and Japan were responsible for the largest increases in U.S. exports of semiconductor manufacturing equipment in 2017. The increases were driven by new semiconductor manufacturing facilities abroad as well as significant expansions and retooling of existing facilities, particularly in South Korea, China, and Taiwan.[2] The increase of exports to the East Asia region follows the decade-long trend of increased semiconductor manufacturing activities and strong demand for high-technology intermediate products in the region.[3] Overall, increased equipment investments by so-called “foundries”[4] and the establishment of new fabrication facilities have fueled demand for U.S. semiconductor manufacturing equipment in Asia.[5]

After several years of decline, U.S. domestic exports of farm and garden machinery grew by $1.1 billion (13.2 percent) in 2017, mainly in the tractor (and tractor parts), irrigation equipment, and combine harvester segments. Over the previous four years, record harvests and crop production led to declines in commodity prices and farmer incomes, resulting in a global weakening in demand for farm equipment.[6] Starting in 2017, however, the farm equipment markets in some countries began to recover, leading to increased U.S. exports of such equipment. For example, retail sales of tractors and combines rose 13 percent in South America in 2017 due to improving economic conditions in Brazil and Argentina. In Western Europe, retail sales of agricultural equipment also increased, with the strongest growth occurring in Germany, Italy, and the United Kingdom. In Canada, the aging of farm equipment fleets has led to some replacement activity, particularly for tractors and combines.[7]

U.S. Imports

U.S. imports of machinery rose by $16.9 billion (9.4 percent) in 2017, driven by increases in U.S. consumer spending, business investment, and residential housing construction. The largest increase was in U.S. imports of semiconductor manufacturing equipment (up by $3.2 billion, 28.7 percent), miscellaneous machinery (up by $2.1 billion, 17.3 percent), and household appliances (up $1.7 billion, 6.6 percent).

Table MT.2: Machinery: Leading changes in U.S. exports and imports, 2013–17

 
Million $
 
Item
2013
2014
2015
2016
2017
Absolute change,
2016–17
Percent
change,
2016–17
U.S. domestic exports:
 
 
 
 
 
 
 
    Increases:
 
 
 
 
 
 
 
        Semiconductor manufacturing equipment (MT019A)
13,133
14,555
15,894
16,635
21,362
4,727
28.4
        Farm and garden machinery and equipment (MT009)
11,653
10,732
9,412
8,376
9,480
1,104
13.2
    All other
97,642
102,046
94,587
83,674
84,196
522
0.6
        Total
122,428
127,333
119,893
108,685
115,038
6,353
5.8
U.S. general imports:
 
 
 
 
 
 
 
    Increases:
 
 
 
 
 
 
 
        Semiconductor manufacturing equipment (MT019A)
10,940
13,411
11,049
11,052
14,226
3,174
28.7
        Household appliances, including commercial              applications (MT004)
22,619
24,322
26,263
25,859
27,574
1,715
6.6
    All other
136,668
147,796
148,573
142,625
154,614
11,988
8.4
        Total
170,227
185,529
185,884
179,537
196,414
16,878
9.4

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

The increase in U.S. imports of semiconductor manufacturing equipment was driven by growth in investment by some of the major U.S. semiconductor manufacturers. Intel, for example, increased capital spending by an estimated 25 percent in 2017.[8] Overall, purchases of semiconductor manufacturing equipment by North American manufacturers rose by an estimated 24 percent to $5.6 billion in 2017.[9] Within the industry, increases in capital spending are being driven by 3D NAND[10] flash memory markets and investment in advanced processing technologies.[11]

U.S. imports of household appliances grew by 6.6 percent in 2017, with the largest increases (by value) occurring in the vacuum cleaner, washing machine, refrigerator, and stove categories. Overall, increases in U.S. imports of large appliances stemmed from growth in U.S. disposable income and the recovery of the U.S. housing market over the past few years. During 2013–17, for example, housing starts grew at an annualized rate of 6.8 percent, with the biggest single-year increase occurring in 2013, when housing starts rose by 18.5 percent.[12] The appreciation of the U.S. dollar during 2013–17 also resulted in higher penetration of household appliance imports.[13] By contrast, increases in imports of vacuum cleaners, fans, and other small household appliances have resulted from intense price competition from foreign manufacturers located in low-cost countries. Such competition has, in turn, led some U.S. companies to relocate production facilities to low-cost jurisdictions (most notably China).[14] That situation has likely driven up U.S. imports, as small appliances manufactured in these U.S.-owned facilities are shipped to the United States.

 

[1] As appropriate, this section will address total exports, domestic exports, and re-exports.               

[2] SEMI, “SEMI Reports 2017 Global Semiconductor Equipment Sales,” April 5, 2018; SEMI, “SEMI Data Projects New Highs,” January 2, 2018.

[3] USITC, Economic Effects of Significant U.S. Import Restraints, September 2017, 160–62; Miller, Semiconductor Machinery Manufacturing in the US, November 2017, 17–18.

[4] Foundries are dedicated semiconductor manufacturers with no design capabilities. VerWey, “Global Value Chains,” March 2018, 1.

[5] Miller, Semiconductor Machinery Manufacturing in the US, November 2017, 18.

[6] AGCO, AGCO Form 10-K, February 23, 2018, 21.

[7] AGCO, AGCO Form 10-K, February 23, 2018, 21.

[8] Statista, “Leading Semiconductor Chip Manufacturers,” March 2017.

[9] SEMI, ”$55.9 Billion Semiconductor Equipment Forecast,” December 12, 2017.

[10] Rouse, “Definition: 3D NAND Flash,” May 2016. A 3D NAND flash is a type of flash memory in which the memory cells are stacked vertically in multiple layers.

[11] Statista, ”Leading Semiconductor Chip Manufacturers,” March 2017.

[12] Miller, Major Household Appliance Manufacturing, May 2018, 6.

[13] Miller, Major Household Appliance Manufacturing, May 2018, 4.

[14] Roth, Vacuum, Fan, and Small Household Appliance Manufacturing, February 28, 4.

 

Bibliography

AGCO, Inc. AGCO, Inc. Form 10-K: Annual Report for Securities and Exchange Commission, February 23, 2018. http://investors.agcocorp.com/phoenix.zhtml?c=108419&p=IROL-secToc&TOC=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9vdXRsaW5lLnhtbD9pcGFnZT0x
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Miller, Dylan. Major Household Appliances Manufacturing in the United States. IBISWorld, May 2018. https://www.ibisworld.com/industry-trends/market-research-reports/manufacturing/electrical-equipment-appliance-component/major-household-appliance-manufacturing.html (fee required).

Miller, Dylan. Semiconductor Machinery Manufacturing in the US. IBISWorld, November 2017. https://www.ibisworld.com/industry-trends/market-research-reports/manufacturing/machinery/semiconductor-machinery-manufacturing.html (fee required).

Roth, Ryan. Vacuum, Fan, and Small Appliance Manufacturing in the United States, February 2018. https://www.ibisworld.com/industry-trends/market-research-reports/manufacturing/electrical-equipment-appliance-component/vacuum-fan-small-household-appliance-manufacturing.html (fee required).

Rouse, Margaret. “Definition: 3D NAND Flash.” What Is (blog). TechTarget, May 2016. https://searchstorage.techtarget.com/definition/3D-NAND-flash.

SEMI. “$55.9 Billion Semiconductor Equipment Forecast—New Record with Korea at Top,” December 12, 2017. http://www.semi.org/en/559-billion-semiconductor-equipment-forecast-new-record-korea-top.

SEMI. “SEMI Reports 2017 Global Semiconductor Equipment Sales of $56.6 Billion,” April 5, 2018. http://www.semi.org/en/Global-Equipment-Sales-56-6-Billion.

SEMI. “SEMI Data Projects New Highs in Fab Equipment Spending,” January 2, 2018. http://www.semi.org/en/semi-data-projects-new-highs-fab-equipment-spending.

Statista. “Leading Semiconductor Chip Manufacturers by Capital Expenditure from 2015 through 2017 (in Million U.S. Dollars),” March 2017. https://www.statista.com/statistics/727020/worldwide-semiconductor-chip-manufacturers-largest-capex/.

U.S. International Trade Commission (USITC). The Economic Effects of Significant U.S. Import Restraints: Ninth Update 2017. USITC Publication 4726. Washington, DC: USITC, 2017. https://www.usitc.gov/publications/332/pub4726.pdf.

VerWey, John. “Global Value Chains: Explaining U.S. Bilateral Trade Deficits in Semiconductors.” U.S. International Trade Commission. Executive Briefing on Trade, March 2018. https://www.usitc.gov/publications/332/executive_briefings/ebot-semiconductor_gvc_final.pdf.