Machinery

Author: Andrew David
Senior International Trade Analyst

Change in 2014 from 2013:

To view changing data, mouseover the graphic below.

U.S. total exports: Increased by $5.9 billion (4 percent) to $145.5 billion
U.S. general imports: Increased by $14.5 billion (9 percent) to $184.7 billion

U.S. total exports of machinery rose by $5.9 billion (4 percent) in 2014, with some of the largest product-group increases driven by higher global investment in semiconductor manufacturing and by oil and gas industry spending on taps, cocks, and valves. The export markets that accounted for the largest increases in exports were Mexico (up $1.7 billion, or 10 percent), South Korea (up $919 million, or 16 percent), and China (up $506 million, or 6 percent) (table MT.1).

Table MT.1: Machinery: U.S. exports and general imports, by selected trading partners, 2010–14

	Million $
						Absolute change,	Percent change,
Item	2010	2011	2012	2013	2014	2013-14	2013-14
U.S. exports of domestic exports merchandise:
China	7,905	8,980	8,533	9,089	9,595	506	5.6
Mexico	11,661	13,440	15,492	16,480	18,146	1,666	10.1
Canada	20,449	23,168	25,093	24,811	25,562	751	3
Japan	2,995	3,478	3,068	3,409	3,832	423	12.4
Germany	3,730	4,225	4,031	3,994	3,877	-117	-2.9
South Korea	5,660	5,516	5,639	5,603	6,522	919	16.4
Taiwan	5,857	4,532	4,602	4,694	4,284	-409	-8.7
Italy	977	1,068	1,012	1,088	1,046	-42	-3.9
United Kingdom	2,759	2,901	2,956	3,051	3,649	598	19.6
Netherlands	1,752	1,841	1,874	1,912	2,155	243	12.7
All other	40,730	46,386	50,253	48,325	48,306	-19	(^a)
Total domestic exports	104,474	115,535	122,554	122,456	126,974	4,518	3.7
Re-exports	12,962	14,785	15,977	17,180	18,552	1,371	8
Total U.S. exports (domestic exports and re-exports)	117,436	130,321	138,530	139,636	145,526	5,890	4.2
U.S. general imports:
China	32,552	36,783	41,031	44,346	48,024	3,677	8.3
Mexico	20,566	23,180	25,328	26,358	28,927	2,569	9.7
Canada	10,906	12,585	13,374	13,589	13,659	70	0.5
Japan	15,324	19,388	20,832	18,908	18,749	-159	-0.8
Germany	12,216	15,389	15,905	16,540	17,729	1,190	7.2
South Korea	5,717	6,443	6,892	6,635	7,101	467	7
Taiwan	2,838	3,519	3,951	4,006	4,366	360	9
Italy	4,401	5,876	6,100	6,313	7,144	831	13.2
United Kingdom	3,030	3,710	3,993	3,993	4,217	224	5.6
Netherlands	2,193	3,554	2,962	2,405	4,270	1,864	77.5
All other	21,309	25,696	27,416	27,120	30,515	3,394	12.5
Total general imports	131,051	156,123	167,784	170,212	184,701	14,488	8.5

Source: Compiled from official statistics of the U.S. Department of Commerce for the 2010–14 period. These reflect all official revisions of previously published data up to June 2014 (accessed April 21, 2015).
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 trading partners 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. Re-exports (also called foreign exports) are further defined in the “Frequently Asked Questions” (FAQs) and in the “Trade Metrics” discussion.
^a Less than 0.05 percent

U.S. general imports increased by $14.5 billion (9 percent) in 2014, with import growth spread broadly across product types—in fact, imports increased in 23 of 30 machinery product groups. Import growth reflected growing demand fostered by increases in U.S. consumer spending, business investment, and residential and nonresidential construction. The countries that accounted for the greatest increase in imports, in value terms, were China (up by $3.7 billion, or 8 percent), Mexico (up by $2.6 billion, or 10 percent), and Germany ($1.2 billion, or 7 percent).

U.S. Exports¹

U.S. domestic exports of machinery substantially increased across a number of product groups, including semiconductor manufacturing equipment (up $1.4 billion, or 10 percent), mechanical power transmission equipment ($1.3 billion, or 45 percent), and taps, cocks, valves, and similar devices ($938 million, or 9 percent) (table MT.2). The largest decline was in U.S. exports of farm and garden machinery and equipment ($933 million, or 8 percent).

Table MT.2: Machinery: Leading changes in U.S. domestic exports and general imports, 2010–14

	Million $
						Absolute change,	Percent change,
Item	2010	2011	2012	2013	2014	2013-14	2013-14
U.S. domestic exports:
Increases:
Semiconductor manufacturing equipment (MT019A)	16,139	14,212	13,118	13,133	14,539	1,407	10.7
Mechanical power transmission equipment (MT021)	2,182	2,748	3,065	2,980	4,326	1,346	45.2
Taps, cocks, valves, and similar devices (MT020)	7,093	8,495	9,099	10,276	11,214	938	9.1
Decreases:
Farm and garden machinery and equipment (MT009)	8,672	11,242	13,145	11,654	10,721	-933	-8
All other	70,388	78,837	84,127	84,413	86,174	1,761	2.1
Total	104,474	115,535	122,554	122,456	126,974	4,518	3.7
U.S. general imports:
Increases:
Semiconductor manufacturing equipment (MT019A)	8,801	13,286	12,205	10,935	13,357	2,422	22.1
Air-conditioning equipment and parts (MT002)	10,657	12,840	14,106	15,027	16,781	1,754	11.7
Household appliances, including commercial applications (MT004)	19,685	20,479	21,503	22,618	24,224	1,606	7.1
Decreases:
Electric lamps (bulbs) and portable electric lights (MT027)	2,706	2,818	2,991	3,185	3,000	-186	-5.8
All other	89,202	106,701	116,979	118,447	127,339	8,892	7.5
Total	131,051	156,123	167,784	170,212	184,701	14,488	8.5

U.S. domestic exports of semiconductor manufacturing equipment grew significantly in 2014, with South Korea, China, and Ireland accounting for the largest increases in U.S. exports. The increase in exports was driven by rising global demand for semiconductor manufacturing equipment, which was projected to grow by 19 percent in 2014 as major manufacturers made significant investments in their plants.² For example, equipment spending in South Korea rose as Samsung and SK Hynix made major investments, and demand rose in China as companies like Samsung, SK Hynix, and SMIC upgraded and expanded their production.³ Intel, meanwhile, invested in its production in Ireland.⁴

U.S. domestic exports of taps, cocks, valves, and similar devices expanded in 2014 because of rising demand from the oil and gas industry. These products are often used in oil and gas refining and pipeline applications, which contributed to the steady increase in exports from 2010 onward. Despite the decline in crude petroleum prices starting in June 2014, several valve manufacturers have stated that their order books were not significantly affected in 2014 and that they will be more likely to feel the impact in 2015.⁵

In the farm and garden machinery product group, U.S. domestic exports declined because of weaker global demand and the strengthening of the U.S. dollar. Global demand for farm equipment weakened because of a fall in commodity prices and incomes.⁶ The biggest decline in U.S. exports was to Canada, and the biggest component of this decline was lower exports of combines, which fell because of a substantial drop in Canadian combine sales. The value of tractor exports to Canada also declined substantially, but the number of units exported increased despite lower commodity prices because of higher demand for small tractors.⁷ The United States remained the leading foreign supplier of combines and tractors to Canada.⁸

U.S. Imports

U.S. imports of machinery rose by $14.5 billion (9 percent) in 2014, driven by increases in U.S. consumer spending, business investment, and residential housing construction.⁹ Overall U.S. demand for machinery grew by 9 percent, roughly the same pace at which imports expanded.¹⁰ The largest increases were in U.S. imports of semiconductor manufacturing equipment (up by $2.4 billion, or 22 percent), air conditioning equipment and parts ($1.8 billion, or 12 percent), and household appliances ($1.6 billion, or 7 percent).

The increase in imports of semiconductor manufacturing equipment, like the increase in exports, is due to growth in U.S. investment by some of the major U.S. manufacturers. The North American semiconductor equipment market was expected to reach $8.31 billion in 2014, up from $5.27 billion in 2013.¹¹

A rise in U.S. residential and nonresidential construction and home improvement investment contributed to the significant increase in U.S. imports of air conditioning equipment and household appliances. U.S. residential housing starts grew 8 percent in 2014; investment in private nonresidential construction, by 11 percent.¹² Further, the strengthening of the U.S. dollar made imported appliances less expensive and further strengthened demand.¹³ For air conditioner equipment, 52 percent of import growth came from Mexico (up by $917 million), which surpassed China as the United States’ largest source for imports of air conditioning equipment and parts for the first time since 2002. For appliances, the increase in 2014 was spread across a number of products, including coffee and tea makers (up by $245 million), assorted refrigerating or freezing equipment (up by $221 million), and electric space heaters and soil heaters (up by $173 million).¹⁴

Imports of air conditioning equipment and household appliances grew from both China (up by $861 million) and Mexico (up by $559 million). Imports from South Korea, however, fell by $330 million, due in part to intensifying price competition; the South Korean won remained strong against the dollar, while the currencies of many other exporters in Asia and Europe fell. In addition, imports of certain residential washing machines from South Korea and Mexico are subject to antidumping and countervailing duties.¹⁵

The largest decrease in U.S. imports was in imports of electric lamps (bulbs) and portable electric lights (down $186 million, 6 percent), reflecting a shift in the U.S. lighting market toward more energy-efficient lighting. One important factor in the shift was the Energy Independence and Security Act of 2007, which prohibited the import or manufacture of many traditional incandescent lamps (100 watts, starting January 1, 2012; 75 watts, starting January 1, 2013; and 40 and 60 watts, starting January 1, 2014). Another factor was the increasing availability and cost-competitiveness of energy-efficient lighting technologies. Both of these changes led to a substantial shift away from traditional incandescent lamps to more efficient halogen incandescent lamps and light-emitting diode (LED) lamps.¹⁶ The decline in imports of traditional incandescent bulbs was especially significant with the implementation of rules phasing out 40- and 60-watt lamps in 2014. LEDs are classified in a different product group, and therefore the shift toward more energy-efficient lighting resulted in a decrease in imports in the electric lamps commodity group.¹⁷

¹ As appropriate, this section will address total exports, domestic exports, and re-exports.
² SEMI, “Semiconductor Equipment Sales Forecast,” December 2, 2014.
³ SEMI, “Semiconductor Equipment Sales Forecast,” December 2, 2014; Dieseldorff, “Solid Years,” December 8, 2014.
⁴ Dieseldorff, “Solid Years,” December 8, 2014.
⁵ Hall, “Why MRC Global Inc.,” February 20, 2015; ShareCast, “Rotork Record Results Outweigh Oil Worries,” March 3, 2015; Powley, “Weir under Pressure from Low Oil Price,” February 25, 2015.
⁶ Tita, “Deere Hurt by Weak Farm-Equipment Demand,” February 20, 2015; Tita, “Deere Projects Sharp Decline in Farm-Equipment Sales,” November 26, 2014; AEM, “U.S. Agricultural Equipment,” February 25, 2015.
⁷ Agrievolution Alliance, 2014 Global Tractor Market Report, n.d. (accessed February 25, 2015); USITC DataWeb/USDOC (for HTS subheadings 8701.30 to 8701.90; accessed January 25, 2015).
⁸ GTIS, Global Trade Atlas database (for HTS subheadings 8433.51, 8701.30, and 8701.90; accessed February 25, 2015).
⁹ USDOC, BEA, “Gross Domestic Product,” January 30, 2015; USDOC, Census, “New Residential Construction in January 2015,” February 18, 2015, table 3.
¹⁰ Based on apparent U.S. consumption for machinery in North American Industrial Classification System (NAICS) 333, which may include a slightly different mix of products than those classified in the machinery commodity groups used by the Commission. USITC DataWeb/USDOC (for commodity groups MT001–MT031; accessed January 25, 2015); USDOC, Census, “Advance Report on Durable Goods Manufacturers’ Shipments,” January 27, 2015.
¹¹ SEMI, “Semiconductor Equipment Sales Forecast,” December 2, 2014.
¹² New privately owned housing units started. USDOC, Census, “New Residential Construction in January 2015,” February 18, 2015, table 3; Seeking Alpha, “Nortek’s (NTK) CEO Michael Clarke,” March 3, 2015; USDOC, Census, “Value of Construction Put in Place at a Glance,” January 2015.
¹³ IBISWorld, Major Household Appliance Manufacturing in the U.S., November 2014, 18.
¹⁴ USITC DataWeb/USDOC (for HTS subheadings 8516.71, 8418.69, and 8516.29; accessed March 5 and 9, 2015).
¹³ USITC, Certain Large Residential Washers from Korea and Mexico, February 2013, 1; USITC DataWeb/USDOC (for HTS statistical reporting number 8450.20.0090; accessed March 5 and 9, 2015); Yoo, “South Korean Exports,” January 26, 2015; Rosenthal, “South Korea Cuts Prices amid Currency War,” February 10, 2015.
¹⁶ Imports of compact fluorescent lamps (CFLs) have been relatively unaffected by the new rules. USITC DataWeb/USDOC (for HTS statistical reporting numbers 8539.31.0050 and 8539.31.0060; accessed January 25, 2015); Bulbs.com website, http://www.bulbs.com/learning/phaseoutschedule.aspx (accessed February 25, 2015).
¹⁷ China is the leading source of LED lamp imports. USITC DataWeb/USDOC (for HTS statistical reporting number 8543.70.7000; accessed January 25, 2015).

Change in 2014 from 2013:

U.S. Exports1

U.S. Imports

U.S. Exports¹