General Industrial Machinery and Equipment, NEC

SIC 3569

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing machinery, equipment, and components for general industrial use, and for which no special classification is provided. Machine shops primarily engaged in producing machine and equipment parts, usually on a job or order basis, are classified in SIC 3599: Industrial and Commercial Machinery and Equipment, Not Elsewhere Classified.

According to the U.S. Census Bureau, 1,622 establishments operated in this category for part or all of 2007. Industry-wide employment totaled approximately 49,304 workers receiving a payroll of more than $2.44 billion. Companies in this industry tended to be small in size, with about 67 percent employing fewer than 20 workers. According to U.S. Supplier Relations, the 2008 value of product shipments totaled $10.9 billion, and the Annual Survey of Manufactures reported that overall shipments for the industry were valued at nearly $11 billion in 2007. Additionally, for the combined "all other miscellaneous general purpose machinery manufacturing" industry (including the welding and soldering equipment manufacturing industry and scale and balance [except laboratory] manufacturing industry), a total of 41,123 employees worked in production in 2006 earning wages of more than $1.5 billion.

The industry leader for 2008 was Illinois Tool Works Inc. of Glenview, Illinois, which had sales of nearly $16 billion and employed about 65,000 people. Tyco Safety Products L.P. of Landsdale, Pennsylvania, came in a distant second with nearly $352 million in 2007 sales and 1,200 employees. Rounding out the top three was Auburn Hills, Michigan-based ABB Flexible Automation Inc.

As companies continued to automate production facilities and move manufacturing operations across U.S. borders, the U.S. Department of Labor projected that employment for the general industrial machinery industry overall would continue to decline through 2014, falling nearly 13 percent to 230,000 workers. For the "other general purpose machinery manufacturing" segment (NAICS 333900), 67,000 actual jobs were lost between 1994 and 2004.

In 1997 the category of general industrial machinery and equipment (not elsewhere classified) employed 61,793 workers with wages totaling more than $2.2 billion. By 2002 the number of workers had decreased about 6 percent to 57,804 workers. Despite this drop, wages increased 9 percent to $2.4 billion. Two years later, the workforce continued to decline, falling 9 percent to 52,534, while wages held steady. There were 2,020 establishments in 2002, with California in the lead with 200 firms. The Great Lakes region was highly concentrated with 827 establishments, and Michigan was the forerunner with 166 establishments.

In 2002 nearly 27 percent of the industry's shipment values were derived from producing filters and strainers (except power fluid), while about 13 percent came from attachments and parts of industrial robots. The industry's shipment values have remained fairly consistent, with 2002 values of nearly $8.8 billion dropping only slightly in 2004 to $8.7 billion. Overall figures jumped to approximately $11.4 billion in 2006 before dropping slightly to $11 billion in 2007 and $10.9 billion in 2008.

Companies in this industry produce miscellaneous manufacturing equipment. The plethora of industry offerings includes such items as altitude testing chambers, hydraulic bridge machinery, industrial centrifuges, cremating ovens, industrial fluid filters, swimming pool heaters, fire hoses, hydraulic jacks, and fire sprinkler systems.

The general industrial machinery and equipment industry is heavily dependent on sales to other manufacturing businesses and to construction industries. In addition, about 30 percent of revenues are derived from exports. Intense capital investments during the U.S. industrial boom of the mid-1900s resulted in steady growth in demand for all types of industrial machinery. By the early 1980s, domestic producers of miscellaneous industrial machines were shipping about $4.5 billion worth of products each year and employing a workforce of about 65,000.

Rampant growth in U.S. capital spending slowed in the 1980s, as foreign-manufactured goods reduced U.S. producers' share of capital goods markets. Machinery purchases by transportation industries were particularly slow, resulting in stagnant sales for miscellaneous machinery. Industry revenues lagged as a result of inflation, climbing at an average rate of about 2 percent per year during the 1980s to approximately $5.36 billion. Recessed commercial and residential construction markets added to industry woes in the late 1980s and early 1990s. Ailing manufacturers scrambled to sustain profitability by raising productivity, cutting their workforces, and merging with or acquiring competitors.

Entering the mid-1990s, producers of miscellaneous machinery hoped to benefit from increased capital spending during the administration of U.S. President Bill Clinton, an uptick in capital equipment replacements, and a devalued dollar, which boosted exports. In addition, sales of machinery to some sectors showed signs of increasing. Construction equipment sales, for example, rose about 3 percent. However, spending on new manufacturing facilities and infrastructure remained flat through the mid-1990s.

Like all other manufacturing industries, the industry was hit hard in the late 1990s and early years of the first decade of the 2000s due to a faltering economy and increased foreign competition. During that decade, the trend toward efficiency and automation buoyed industry companies that manufactured robotic machines and other automated technologies, which posted strong growth. Furthermore, the U.S. Department of Labor reported the output for the general "other general purpose manufacturing" industry segment was expected to have small annual increases through 2014, providing some hope to industry manufacturers.

In 2008, $13 billion in goods were imported to the United States from 135 countries, while exports totaled $14.7 billion to 207 countries.

Current Conditions

In 2010 Dun & Bradstreet listed 2,671 establishments engaged in manufacturing machinery, equipment, and components for general industry use and for which no special classification is provided with a value of $7.12 billion and industry-wide employment of 50,468 workers. On average, each establishment employed 19 workers generating about $3 million in revenues. States with the highest numbers of industry firms were California, Texas, and Michigan. Based on shipment values, California, Missouri, Texas, and Ohio led the nation with shipments totaling nearly $2.6 billion in 2010.

For 2010 the general industrial machinery, not elsewhere classified, sector comprised 14.2 percent of industry share employing 1,284 workers with shipments of $94.8 million. Although the industry was highly fragmented, manufacturers of filters captured 23.6 percent of market share with product shipments totaling more than $1.6 billion in 2010. Also within this industry sector, non-metalworking assembly machines manufacturers commanded 8.5 percent of market share with shipments totaling $810.8 million. Manufacturers of general line filters for the industrial market had shipments of $605.5 million in 2010, while manufacturers of automatic fire sprinkler systems shipped $491.2 million in goods. Dustless blast cleaning equipment manufacturers added $368.1 million to the industry total, assembly line robots for industrial or commercial use reported $356.2 million, and testing chambers for altitude, temperature, ordinance, power producers added another $313.4 million.

As the economy began a slow recovery, industrial production began to show slow but steady improvement during 2010, particularly in industrial packaging and related businesses. Industrial welding also demonstrated good performance in 2010 was industrial welding, but the lack of capital expenditures by end users softened demand for food equipment throughout 2010. In addition, despite the downturn in the overall construction market, Illinois Tool Works Inc. reported a 15 percent increase in revenues from 2009 to 2010 for their construction related businesses. Since a large part of the industrial machinery and equipment manufacturing business was conducted offshore, favorable changes in foreign currency helped offset some stagnating markets in 2010.

Industry Leaders

Illinois Tool Works Inc. reported revenues totaling $13.8 billion in 2009 before rebounding to $15.87 billion in 2010 and had an estimated 60,000 employees worldwide. With market conditions experiencing more favorable conditions, the company' acquisition activity increased by mid-2010. Although sales figures were not available for Tyco Safety Products L.P., its parent company, Tyco International Ltd., reported total 2010 sales of $17 billion and more than 100,000 employees worldwide. Fire-related safety products revenues were responsible for more than $1.5 billion of Tyco"s reported $17 billion. ABB Flexible Automation Inc. posted revenues of $31.5 billion in 2010, slightly below the $31.7 billion reported in 2009. The company's power products division was responsible for nearly $10.2 billion of the reported $31.5 billion in revenues for 2010, followed by their process automation division with $7.4 billion in revenues. The company's power systems division garnered almost $6.8 billion in revenues, the discrete automation and motion division posted $5.6 billion in revenues, and low voltage products accounted for $4.5 billion in revenues.

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