Woodworking Machinery

SIC 3553

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing machinery for sawmills, for making particleboard and similar products, and for otherwise working or producing wood products. Establishments primarily engaged in manufacturing hand tools are classified in cutlery, hand tools, and general hardware manufacturing industries, while those engaged in manufacturing portable power-driven hand tools are classified in SIC 3546: Power-Driven Hand Tools.

Industry Snapshot

According to figures from Dun and Bradstreet, 998 U.S. establishments primarily engaged in manufacturing machinery for sawmills, for making particleboard and similar products, and for otherwise working or producing wood products in 2010. Together these firms employed 6,745 people and generated $570.7 million in annual revenues. A majority of companies were small, with about 84 percent employing fewer than 10 workers. However, companies that employed 10 or more workers accounted for 73 percent of all industry revenues. California, North Carolina, and Florida were the top three states in terms of number of establishments in the industry, whereas a majority of the industry's revenues were earned in California, North Carolina, Oregon, New York, and Alabama. Together these five states accounted for approximately 35 percent of all revenues in the woodworking machinery manufacturing industry in 2010.

Most (402) establishments reported manufacturing woodworking machinery in general; this category also experienced the most sales in 2010 ($328.7 million). Significant subcategories included the production of cabinet makers' machinery (160 establishments with $32.2 million in sales); furniture makers' machinery (149 establishments with sales of $39.3 million); and sawmill machines (74 establishments with $101.5 million in sales). Other major sectors in terms of employment and revenues were the manufacture of woodworking bandsaws, wooden pattern makers' machinery, and sanding machines (other than portable floor sanders).

Background and Development

In the 1980s, the woodworking machinery industry was affected by a slowdown in the housing industry and a general U.S. economic recession. In the early 1990s, the industry was further affected by cutting limits imposed on the logging industry in the Pacific Northwest. However, in 1992, George Delaney, then president of the Wood Machinery Manufacturers of America (WMMA), which represented more than 100 companies in the industry at the time, said the number one issue facing the organization's membership was product liability reform legislation. Woodworking machinery manufacturers often paid as much as 10 percent of their annual sales for liability insurance, a cost that foreign competitors did not face.

In the early 1990s, the woodworking machinery industry benefited from legislation that required woodworking companies to reduce the amount of dust in the air of their factories. Several companies in the industry increased their revenues by manufacturing dust-reduction equipment. Environmental concerns over logging also prompted production of new machinery. With stricter limits on logging, the forest products industry bought updated equipment that reduced the amount of waste in manufacturing wood products.

The Coe Manufacturing Company Inc., founded in 1852, was one of the first companies to manufacture computerized woodworking machinery, introducing a computer-controlled veneer lathe in 1977. Equipment made by the industry included machinery used in cutting, shaping, sanding, gluing, laminating, and finishing wood products.

In 1998, employment levels in the industry spiked to 9,227 workers, but annual losses led to a considerable 24 percent decrease in 2004 to 6,986 workers. Interestingly, the corresponding reduction in overall wages of 5 percent, from about $318 million in 1998 to $302 million in 2004, was not as pronounced. The overall industrial machinery manufacturing industry suffered a loss of 30,000 positions between 1994 and 2004, with a projected loss of 15,000 additional positions from 2004 to 2014, according to the U.S. Bureau of Labor Statistics (BLS).

The U.S. Census Bureau divides the product share of this classification into two categories, woodworking machinery (including parts, attachments, and accessories) and woodworking machinery for home workshops, garages, and service shops (excluding chainsaws and other power-driven tools), with the former leading the industry with almost 80 percent of shipment values in 2002. This was highlighted by the subcategory of woodworking sawmill equipment manufacturing, which accounted for 25 percent of total shipment values.

According to the U.S. Census Bureau, the woodworking machinery manufacturing industry (including sawmills) reached nearly $1.3 billion in total shipment values in 1997, but in 2002 this number dropped nearly 18 percent to about $1.1 billion. Between 2002 and 2004, the shipments in the industry declined another 13 percent to $932 million. However, shipment values reached $1 billion in 2007, despite a global economic downturn.

Other figures from the U.S. Census Bureau showed that employment in the sawmill and woodworking machinery manufacturing industry in 2007 was approximately 5,444 workers, a figure that had dropped to 3,689 by 2009. The International Trade Administration attributed much of the decline to the large number of sawmills that closed in the last two years of the first decade of the 2000s. Of the employees working in the industry in 2009, approximately 60 percent were production workers earning an average wage of $18.57 an hour. The Annual Survey of Manufactures reported that overall shipments for the industry were valued at more than $1 billion in 2007 but fell to $819 million in 2008 and bottomed out at about $393 million in 2009.

One dilemma the industry faced in the late twentieth century was a shortage of qualified and trained workers. Technical schools were not graduating students knowledgeable in woodworking, which threatened the future of the industry. To correct this, the Woodworking Machinery Industry Association (WMIA) developed an interactive CD-ROM recruitment kit for high school students and guidance counselors, educating them about the benefits of working in this industry. Still, in 2008 the BLS predicted a decline in employment of 7.6 percent annually through 2018 in the U.S. machinery manufacturing industry in general; in the subcategory of industrial machinery manufacturing, the drop was expected to be even more severe, topping 23 percent per year.

The industry also dealt with a rapidly changing global marketplace in the first decade of the 2000s. In June 2006 WMIA President Giordano Checchi indicated that in order to remain competitive with foreign manufacturers, the woodworking industry must focus its efforts on using higher-technology equipment with more specialized technicians, training those technicians, and fostering an increased awareness of the economic impact of global economics and cheap labor, in particular from China and other Asian countries. In addition, safety was a continuing issue for the industry and was addressed by the WMIA by providing input into standardized safety signs and labels along with the association's creation of safety videos and workbooks.

Current Conditions

By 2010, the woodworking machinery manufacturing industry was looking forward to a recovery from the economic downturn of the late 2000s. In a 2010 report, IBISWorld predicted the industry would recover along with the economy as consumer confidence and per capita income increased. According to the report, "Downstream industries, such as wood product manufacturers, carpentry contractors and residential and nonresidential construction industries, are also expected to pick up, supporting renewed revenue growth."

Other positive news for the industry came in the form of a decline in imports. According to the WMMA, imports of woodworking equipment (including machinery, cutting tools, parts, and accessories) had begun to decline in 2007 and continued this trend through into the next decade, when 2010 imports dropped 17 percent, as compared to 2009, to $780 million. China was the number one supplier of products from outside the United States. Exports, on the other hand, rose 12 percent in 2010, reaching $255 million. Canada was the top market for U.S. exports in this industry, accounting for about 30 percent of all exports, followed by Mexico, Australia, Germany, and Colombia. Together, the top 10 export markets accounted for 72 percent of woodworking equipment exports in 2010.

Industry Leaders

Industry leaders in the early 2010s included Hardinge, Inc. of Elmira, New York. Hardinge had sales of $257 million in 2010 and employed 1,189 people. Accu Systems Inc. of Salt Lake City, Utah, had revenues of more than $3 million that year. Duluth, Georgia-based SCM Group North America Inc., a subsidiary of SCM Group International in Luxembourg, registered sales of $20 million. Coe Manufacturing Co. Inc. of Painesville, Ohio, was founded in 1852 as The Anderson and Coe Co. and reported revenues of more than $200 million in the late 2000s

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