Manufacturers cautiously optimistic, noting increased effort required in training and development.
The VDW (German Machine Tool Builders’ Association) is expecting production in the machine tool industry to grow by 9% this year to a volume of EUR 15.5 billion. In nominal terms, this is only 10% below the record result of 2018. At the annual press conference in Frankfurtam Main, Germany, Franz-Xaver Bernhard, Chairman of the VDW, said: “We have largely overcome the effects of the pandemic. This is reflected in the growth in production and in the order levels, which are only just short of the record result of 2018.”
The industry has entered the current year with a significant backlog of orders. Even though the gap between orders and sales is currently closing, the German Federal Statistical Office is still reporting a twelve-month backlog of orders for the machine tool industry. “This means that companies are well placed to weather any slump in orders in the first half of 2023, as suggested by the most recent figures,” explained Bernhard.
Capacity utilisation is also rising steadily, having returned to 91.1% in January. The latest VDMA flash survey conducted at the beginning of December shows that 45% of machine tool manufacturers are cautiously optimistic about the current year.
Double-digit growth in 2022
According to VDW estimates, machine tool production grew by 10% last year, three points more than had been expected in the fall. This corresponds to a real increase of 3% and a volume of around EUR 14.1 billion. “At last, more machines can now be completed and delivered, because the supply situation for many metal components has improved,” points out Bernhard. However, electronic component supplies remain tight.
Following a weak previous year, domestic sales grew by 16%, more than twice as fast as exports at only 7%. Europe came last within the Triad, at minus 3%. Eastern Europe performed particularly weakly because trade with Russia has largely collapsed. Cumulatively, German shipments have declined by nearly 80% since 2018. Italy has performed exceptionally strongly in the past two years, driven by a substantial subsidy policy for the purchase of machinery. Exports to Asia rose by 11%.
There was strong growth in exports to Thailand, India, Japan, and South Korea in particular. China was the main driver the year before. In 2022, the zero Covid policy made machine deliveries more challenging. Some exports were replaced by local production. Finally, the Americas were the main driving force with a 24% increase, driven by Brazil, the USA and Mexico. As the second largest market, the US is gaining in importance and, accounting for an export share of 14.7%, is closing in on China, at 18.7%.