Metav 2016 – Machine Tool Industry Stable Development in Uncertain Market Conditions

Author / Editor: Udo Schnell / Lisa Saller, Lisa Saller

Order replacements and turnover in the German machine tool industry continue on a high level. The VDW is counting on a result of around 2 % over the whole of 2015. This is slightly lower than expectations at the beginning of the year.

Dr. Wilfried Schäfer, VDW CEO: “In the third quarter, our sector felt a tailwind from the domestic market and the Eurozone.”
Dr. Wilfried Schäfer, VDW CEO: “In the third quarter, our sector felt a tailwind from the domestic market and the Eurozone.”
(Photo: VDW)

Order placements in the German machine tool industry fell by 1 % in the third quarter of 2015 compared to the same period the previous year. This was announced by the VDW (German Machine Tool Builders' Association). Orders on the domestic market rose by 9 %, foreign orders fell by 7 %. In the first nine months of 2015, order placements stagnated compared to the previous year. Domestic market orders fell by 3 %, foreign demand registered a plus of 1 %.

“In the third quarter, our sector felt a tailwind from the domestic market and from the Eurozone,” as Dr. Wilfried Schäfer, CEO of the sector federation VDW in Frankfurt am Main, commented on the result. To everyone's surprise, Western Europe proved to be the motor of demand for German machine tools. The Americas, in contrast, disappointed with a decline in orders across the whole field. Asia, on the other hand, scored with modest growth. Good business with South Korea and Japan, however, was balanced out by a substantial minus in orders from the biggest market, China. Domestic business, which constitutes about a third of the total orders placed, likewise remained a firm support, driven by consumer spending with resulting greater investment in industry.

A Growth of 3 % was expectet at the Beginning of the Year

In the first three quarters of 2015, orders placed settled down at a high level. In the same period, there was even an increase in turnover of 2 %. The VDW assumes that this will also be the overall result for 2015. This does not quite match expectations from the beginning of the year. “At that point we assumed 3 % growth for 2015. In a comparatively cyclical sector such as machine tool industry, prognosis fluctuations of one percentage point are, however, not unusual,” the VDW CEO says. In addition, the economic environment is marked by a great deal of uncertainty. However, with a final result of around 14.8 billion euros, we have maintained our best-ever level,” as Schäfer concludes.

Important partner sectors can also report positive figures. After a turnover plus of somewhat over 3 % in the German medical technology industry in 2014, growth of at least 6 % is expected for the current year. This would bring the total turnover of the more than 1200 manufacturers to around 27 billion euros in 2015.

According to figures from the industrial federation Spectaris, it was possible to achieve surprisingly high growth rates in the first half of the year in particular, while the mood in the last third became a little less bright because of developments in threshold countries. The business climate is nevertheless still positive.

German Medical Technology Industry is fundamentally optimistic for the next Year

As the Federation goes on to say, the predicted turnover plus resulted from equally vigorous growth on both domestic and foreign markets. Accordingly, the value of domestic turnover for the whole of 2015 will be 8.67 billion euros, the foreign turnover will reach 18.30 billion euros. This works out at an almost unchanged export quota of close to 68 %.

For 2016, according to Spectaris, firms remain fundamentally optimistic despite existing uncertainty. In total, growth in turnover is expected, although probably somewhat weaker than in 2015. Growth is anti­cipated in foreign markets in particular. Despite a possible slowing down of market development in China, prospects in Asia continue to be assessed as fundamentally positive. In the North American market, too, growth is again expected. On the whole, however, certification hurdles will increasingly inhibit international business, Spectaris adds.

The figures from the area Measurement and Testing Technology are also positive. The VDMA specialist group Image Processing thus expects growth in turnover of around 11 % for 2015.

“The European industrial image processing sector is breaking all records. According to a current VDMA market survey, the turnover in the sector grew by 16 % in 2014. For 2015, the firms surveyed anticipate further growth of 11 %,” as Olaf Munkelt, chairman of the VDMA specialist group Industrial Image Processing, reports. MM

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