The South Korean media outlet Korea Economic Daily reported that domestic machine tool orders in the second half of 2025 were about half of what they were in the same period last year.
Through November 2025, domestic orders totaled US$474.93 million (697.4 billion won), nearly a 10% decrease from the previous year. In the second half of the year (July–November), orders amounted to US$117.20 million (172.1 billion won), a 47.5% decrease compared to the same period last year US$223.30 million (327.9 billion won).
Meanwhile, global machine tool orders remained robust at approximately US$1.77 billion (2.5946 trillion won), marking a 6% year-on-year increase and making the domestic decline particularly pronounced. Industry analysis suggests that companies’ overseas investments and shifts in production bases, along with increased orders from overseas, particularly from the US, are offsetting weak domestic demand. Some argue that this decline in orders reflects weak domestic manufacturing investment and highlights its connection with policy trends and economic cycles.
Source: Livedoor
PSR Analysis: This news suggests that the South Korean industrial machinery manufacturing market is undergoing a structural transformation rather than experiencing a temporary decline in orders due to economic cycles.
The sharp decline in domestic machine tool orders suggests that South Korea’s manufacturing sector is shifting its focus from investing in new domestic equipment to investing in overseas bases and outsourcing. Consequently, the domestic market is no longer a growth engine for industrial machinery manufacturers.
Over the next three to five years, reliance on an “industrial structure premised on overseas demand” is expected to intensify. The medium- to long-term impact cannot be considered minor. Rather, it should be viewed as significant, signifying a fundamental shift in the role of the domestic industrial machinery market.
Business models based on a recovery in domestic demand will become unsustainable. Only manufacturers capable of redesigning their product development, production, and sales processes on a global scale will remain competitive. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
