Press release

Global Machine Tool Revenues Are Expected to Decline 10% to 2017 Levels

Source: OIDA 2019 0
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Source: OIDA 2019

Companies selling laser and other optical products into the global
machine tool sector should expect a decline in sales in 2019 near 10%,
compared to 2018. This would place this year’s sales for components and
systems in the category near the value for 2017, second only to 2018,
according to the mid-year forecast from the industry trade association OIDA
(OSA Industry Development Associates).

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Source: OIDA 2019

Source: OIDA 2019

“This continues to be a ‘half full and half empty’ market for companies
in this sector,” said Dr. Tom Hausken, OSA Senior Industry
Advisor. “Sales are off from the peak, but it is mid-2019 and the
economy is holding.” Many economic indicators in the U.S. are nominally
very good, such as record low unemployment and low inflation but
economists warn that the economy is fragile, and particularly vulnerable
to repercussions from trade disputes, Hausken notes. A large part of the
growth in recent years has been to Chinese customers, with sales by
prominent laser companies to China as much as 43% of company revenues,
making them especially exposed in a trade war. Investors reacted in
2018, and the share prices of some companies in the sector were driven
down by 50% or more.

OIDA monitors over two dozen companies in the sector, and tracks
quarterly results of a group that have combined revenues over U.S. $40
billion annually. OIDA’s index indicates a stronger decline than usual
in Q1 2019, falling 14% from the previous quarter, following weakness in
the second half of 2018. OIDA expects quarter-over-quarter growth in Q2,
but sales in the second half are unlikely to match the levels of 2018.

“Longer term, OIDA expects compounded growth in the range of 5%,
slightly greater than global economic growth,” Hausken adds. “But
current conditions may delay a return to growth until after 2019, or
possibly after 2020.”

More information appears in OIDA’s upcoming OIDA Market Update,
available to OIDA members. For media inquiries or a copy of the report,

About OIDA

OSA Industry Development Associates (OIDA),
a trade association operated as a division of The Optical Society (OSA),
serves and represents organizations engaged in the business of optics
and photonics–from start-ups to Fortune 500s. In support of its member
companies, OIDA promotes and protects the business of optics and
photonics in driving innovation, creating jobs, and accelerating growth
in the U.S. and around the world. OIDA provides exclusive roadmap
reports and market data for the industry, serves as the voice of the
industry to government and academia, acts as a liaison with other trade
associations worldwide and provides a network for the exchange of ideas
and information within the optics and photonics community.

About The Optical Society

Founded in 1916, The Optical Society (OSA) is the leading professional
organization for scientists, engineers, students and business leaders
who fuel discoveries, shape real-life applications and accelerate
achievements in the science of light. Through world-renowned
publications, meetings and membership initiatives, OSA provides quality
research, inspired interactions and dedicated resources for its
extensive global network of optics and photonics experts. For more
information, visit