Precision Machine Shop


Precision machine shops have long been an integral part of the manufacturing landscape in the United States. These specialized facilities play a vital role in producing high-quality components with utmost accuracy for various industries. However, in recent years, there has been a concerning trend of their disappearance. The states of Texas, Pennsylvania, Minnesota, Illinois, and others have seen declines in the number of machinists employed. The state of Texas especially has seen a significant reduction in the quantity of both machine shops and machinists. Texas relies heavily on the oil and gas industry for the demand of precision parts. This industry is being negatively impacted by the transition from burning traditional fossil fuels to using cleaner fuel sources such as wind, solar and electric power.

There was a slight increase in the number of machinists employed in the US after COVID. However, it was still not to the levels seen in 2021 and nowhere close to the levels seen 10 years ago.

The data below is from the U.S. Bureau of Statistics Occupational Employment and Wage Statistics

Table 1 – Quantity of Employed Machinists Year to Year

Table 1 – Quantity of Employed Machinists Year to Year

Table II  – Qty Comparison of Employed CNC Lathe and CNC Mill Machinists in 2012 vs 2022

Table II  – Qty Comparison of Employed CNC Lathe and CNC Mill Machinists in 2012 vs 2022 
Precision Machine Shops, CNC Machine Shops
Lathe and Machinists 10 year change in QTY of Employees per state
Precision Machine Shops, CNC Machine Shops

Offshoring and Globalization

Container ship with cargo at dock with loading cranes.Precision Machine Shops, CNC Machine Shops

One of the primary factors contributing to the decline of precision machine shops in the United States is the rise of offshoring and globalization. According to a recent Wall Street Journal article, only 8.4% of U.S. nonfarm payroll positions are in manufacturing. As manufacturing operations have expanded across borders, companies have sought cost-effective solutions. For example, one popular solution is to outsource computer numerical control (CNC)  precision machining needs to overseas countries with lower labor costs. Consequently, this geographical shift results in an increased reliance on overseas suppliers, leading to a reduced demand for U.S. domestic precision machine shops. 

Automation and Technological Advancements

Precision Machining Automation, Precision Machining, Precision Machine Shops, CNC Machine Shops

The advent of automation and other rapid technological advancements has revolutionized the manufacturing sector in the United States. Unfortunately, while these innovations have undoubtedly improved efficiency and precision, they have also led to a decrease in the demand for manual labor. For example, many machine shops now employ robotics for the loading and unloading of their CNC equipment. They no longer rely on humans to perform this task. Automated precision machining centers and CNC machines can handle complex tasks with minimal human intervention. However, they make traditional machine shops that employ human labor for the same tasks less essential for certain operations.

Skilled Labor Shortage for Precision Machine Shops

Welder at work, Precision Machine Shops, CNC Machine Shops

Another significant challenge faced by precision machine shops in the United States is the shortage of skilled labor. As the baby boomer generation continues entering retirement age, there is a widening skills gap in the manufacturing industry. The decline in the number of new apprenticeships and vocational training programs has contributed to the diminishing pool of skilled CNC machinists. The absence of highly trained workers has hampered the growth and sustainability of machine shops, making it harder for them to compete with offshore alternatives.

Cost and Competitive Pressures

Cost considerations also play a crucial role in the disappearance of precision machine shops. Overseas manufacturers can often offer lower prices due to lower labor and operational costs. This competitive nature of the global market puts pressure on domestic machine shops to provide high-quality products at competitive prices. Smaller shops struggle to invest in expensive machinery upgrades. Consequently, these smaller shops find it difficult to maintain profit margins amidst intense competition, ultimately leading to closures.

Consolidation and Industry Concentration

Consolidation within the manufacturing sector has also contributed to the disappearance of US machine shops. Larger manufacturing companies often seek to streamline their supply chains and reduce costs by consolidating their precision machining needs into a smaller number of preferred suppliers. As a result, this concentration of business limits the opportunities available for smaller precision machine shops, making it difficult for them to sustain operations.

OEM Vertical Integration Hurting Precision Machine Shops

Vertical integration is the practice of expanding a company’s operations by acquiring businesses that are part of its supply chain. This practice has been a significant strategy employed by major US manufacturers in recent years. In the context of machine shops, vertical integration involves manufacturers acquiring or establishing their own in-house precision machining capabilities. The increasing trend of vertical integration among major US manufacturers poses challenges for traditional independent machine shops. As manufacturers bring precision machining capabilities in-house, the demand for external machining services decreases. This decrease leads to a decline in business opportunities for independent machine shops. However, it is important to note that there is still a need for specialized precision machining services that manufacturers may not be able to handle in-house.

Shifting Manufacturing Trends Moving Away From Precision Machining

The evolution of manufacturing trends has impacted the demand for precision machine shops. In recent years, there has been a shift towards additive manufacturing, commonly known as 3D printing. While 3D printing offers unique advantages in terms of customization and rapid prototyping, it poses a challenge to traditional machining methods. This shift in preference has further reduced the demand for traditional precision machine shops.


The decline of machine shops in the United States can be attributed to a combination of factors, including offshoring, automation, a shortage of skilled labor, cost pressures, shifting manufacturing trends, and industry consolidation. While these factors have undoubtedly presented challenges, it is essential to recognize that precision machine shops, such as Parallel Ventures in Tucson, continue to play a vital role in certain industries that require specialized expertise and complex precision machining operations. To preserve this critical aspect of the manufacturing ecosystem, Parallel Ventures’ efforts will focus on promoting skilled labor development, fostering innovation, and creating a supportive environment for domestic precision machine shops to thrive.

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