VDW Germany: Machine Tool Industry Continues to Grow

At the annual press conference of VDW (Association of German Machine Tool Manufacturers), Dr Heinz-Jürgen Prokop, chairman of VDW, was optimistic about future trends in the German machine tool sector. Political insecurities regarding developments in UK and US, however, dampen the enthusiasm at the beginning of the year.

"We expect a significant increase in production of 3% for the current year", said Dr Heinz-Jürgen Prokop on Thursday in Frankfurt, Germany. This assessment is based on the international industrial production and the global machine tool demand, which are expected to develop well, according to Oxford Economics, VDW's forecast partner. The forecast is also supported by the high order backlog from 2016. By November, the German manufacturers' orders rose by 7%, driven by foreign countries. Internal orders remained at the previous year's level. Overall, the German machine tool industry is particularly benefiting from the large-volume automotive project business worldwide.

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Record production in 2016

The VDW forecast is based on the record year 2016. The German machine tools industry produced machines worth EUR 15.2bn, an increase of approximately 1%. "With this, our industry achieved a production record", explains Prokop.

With an export rate of 66%, exports fell by 3% to approximately EUR 9.1bn. This can be explained by pronounced demand damping in China. However, China remains the most important sales market for German machine tools. Nearly one-fifth went there in 2016.

In 2016, an average of 69,000 women and men were employed in the German machine tool industry. Capacity utilization in Germany was on an annual average of 88%. At 6.9 months, the order backlog was slightly higher than in 2015.

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German machine tool manufacturers continue to be on top in the international competition. In 2016, it was successful to become a world champion of exporting countries ahead of Japan, VDW says. The manufacturers achieved an export result of EUR 7.6bn without parts and accessories. The previous year's winner Japan suffered heavy losses of more than one-fifth to EUR 6.3bn. The reason is the weakness of the Asian sales market.

In production, Germany is one of the world's leading companies as well. According to preliminary figures, Japan is only just ahead with EUR 11.4 bn before Germany with EUR 11.25bn. The undisputed leader in production is and remains China with EUR 16.5bn.

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