EMO Metal

Global machine tool industry poised for growth in 2014

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More than 2,100 manufacturers from 43 countries will be showcasing innovative production technology at EMO Hannover until 21 September. Taking place under the tagline “Intelligence in Production”, the world’s biggest and most important platform for innovations in metalworking is expected to boost business for the coming months. This view was echoed by Martin Kapp, Chairman of the industry association VDW (German Machine Tool Builders’ Association), which organizes the event, when he spoke at the opening press conference for EMO in Hannover on Monday. Speaking about the international market, he said that industry pundits expect things to “pick up” in 2014.

This confidence is backed by recent forecasts on global economic growth and industrial production, as well as predictions by British business analysts at Oxford Economics that the level of investment in key user sectors such as the automo-bile and automotive supply industries, mechanical engineering, metal production, processing and metalworking, electrical engineering and electronics, fine me-chanics and optics, medical technology as well as the aerospace, railway vehicle and shipbuilding industries is likely to grow by 6.5 percent worldwide in 2013. They also predict that the level of investment could be almost twice that figure in 2014 – 12.7 percent. Martin Kapp maintains that “…this will not translate one to one into investment in machine tools, however the trend is clear”.

International machine tool sales break one record after another
This positive trend can be seen in the worldwide sales of machine tools, which continue to break one record after another. In the current year, growth of two percent is expected, which would bring sales up to approx. 68 billion euros – the highest level ever recorded in this sector. A new record is expected next year.

Growth has been registered – without exception – in all of the top ten markets. In Asia, sales are being driven by China, South Korea and Taiwan in particular, but machine tool sales are also increasing in other regions of the world, such as the USA, Mexico and Russia.

German machine tool production stagnating in 2013
Germany is one of the big players on the international machine tool scene and has a strong influence on trends in the international machine tool trade. Last year, German companies produced machines and services valued at 14.2 billion euros. This represents growth of 10 percent and matches the pre-crisis level of 2008. Martin Kapp reported that the industry is confident that “the good results of the previous year can be maintained”. However, for this to happen, orders in the second half of 2013 need to be higher than in the first six months. Compared to the record number of orders received in 2011 there has been a clear drop in demand. The total number of orders was down by 13 percent in the first half year – domestic orders fell by 19 percent, while orders from foreign customers dropped by 9 percent.

Nonetheless, the situation regarding the level of orders has stabilized recently. Growth is being driven by orders from Russia, South Korea, Brazil and Mexico, but the United Kingdom, Austria and Italy are also helping to boost business. July of this year saw domestic orders go into positive figures again for the first time in 17 months. There are also positive signs that the main user industries in Germany will be investing more in 2014. As Kapp points out: “By then, at the latest, the German machine tool industry can look forward to some positive results” in terms of orders. Accordingly, the Ifo business climate index has registered an upward trend in the German capital goods sector. Similar results were recorded for the purchasing manager index, which showed the Euro area, headed by Germany, moving back into growth for the first time in two years.

German President Gauck calls for reliable conditions for SMEs
On the morning of the first day of EMO Hannover 2013, German President Joachim Gauck officially opened the event. Addressing an invited audience of more than 800 representatives from business and politics in Germany and abroad, President Gauck stressed the importance of small and medium-sized companies, praising their flexibility, drive and innovativeness. However, these smaller companies need reliable legal conditions. In this connection Gauck condemned protectionism, unfair trading practices and product piracy, promis-ing: “We will combine all efforts to stop patent theft. Likewise, we will not ac-cept the theft of data from innovative companies. There is a need for interna-tional agreements in this area so that we can guarantee reliability.”

At the same time Gauck also encouraged companies to step up investment activities in Germany and Europe. Without sufficient investment Europe will not be able to uphold its position as a world leader entitled to have a say in shaping the future. Gauck appealed to the business community: “Do not be satisfied with using Germany as a business location, play an active role in building it as a base.” In this connection he mentioned a number of keywords: creating opportunities for young people in Europe, investing in education, maintaining the innovative capacity of society and using the opportunities offered by an open and democratic society.

 

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