German machine tool industry still sees chances for growth

In the first half of 2014, the German machine tool industry maintained its production output at the previous year’s high level of around 6.5 bn euros.

vdw5“Thanks to healthy domestic demand, the sector has put up a valiant performance”, reports Dr. Wilfried Schäfer, Executive Director of the VDW (German Machine Tool Builders’ Association), speaking at the AMB in Stuttgart on 16 September 2014. At the same time, he admits that the association’s forecast for production output, with a plus of 3 per cent, is appearing increasingly over-optimistic.

Chances for growth are looking quite good
Nonetheless, the VDW definitely sees grounds for optimism. Up to July, order bookings had risen by 7 per cent. Important momentum is coming from abroad. “For the year’s second half, we are expecting a reversal of roles between domestic and foreign demand”, says Schäfer. Domestic orders were in fact still rising overall in the year’s first half, by 18 per cent, while export orders were lightly down at minus 1 per cent. In the months of May to July, however, they were already down by 5 per cent, and in July they fell by 24 per cent, the first double-figure drop in a single month for eight months.

For export orders, the picture is reversed: they have been rising since May, from May to July they were 23 per cent up on the preceding year’s equivalent figure, and most recently, in July of this year, by an impressive 42 per cent. The growth consists partly of large-sized orders, but not exclusively. Rather, it is broadly based, and is also showing up in the figures for metal-cutting technology.

America and Eastern Europe are the determinant factors in demand from abroad
According to a survey commissioned by the VDW, it’s primarily orders from America and parts of Europe that are responsible for the upturn. The intensive re-industrialisation efforts in the USA and high capital investment by the automotive industry in the NAFTA nations of Mexico and Canada, and in Eastern Europe, have here ensured higher order volumes for “Made in Germany” production technology.

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