Tag Archives: economy

European vision on manufacturing needed

During the General Assembly that took place in Ghent on 12 June 2012, CECIMO’s Economic Committee asserted a few important facts (See below) and claimed for a European vision for the manufacturing industry.

  • The output of the European machine tool industry increased in 2011 by 26% against 2010 to nearly 21 bn Euros; stabilisation of production is forecasted for 2012
  • Whereas CECIMO exports reach almost the 2008 level, domestic demand remains weak in Europe
  • Difficulties in accessing to finance are severely hampering business and investments in many European countries, despite a real demand from customers

The production of almost 21 bn Euros in 2011 is approximately 15% lower than in the record year of 2008. At the same time, CECIMO exports at 16.5 bn Euros in 2011 reached almost its all-time high previously observed in 2008. Imports and apparent consumption, which reflect the sentiment in the European market, was far below their 2008 values, despite strong increases in 2011 compared to 2010. Imports grew by 37% to 7.9 bn Euros while the apparent consumption increased by 29% to 12.2 bn Euros, which is far below the 2008 levels.

Know-how first
European machine tool builders sell their products to almost all the countries in the world. “The machine tool industry is not a project that can be created overnight and be run without employees. Europe has been developing its machinery base for many generations and now this high value-added industry with its knowledge-intensive skilled workforce is a backbone of modern European economy”, comments Martin Kapp, CECIMO President. He adds: “Our overseas competitors recognize very well the advantage of having an industry which is at the core of the next industrial revolution and are pursuing proactive policies in order to reinforce their position or quickly acquire the necessary know-how”.

Europe clearly lacks a strategy for its manufacturing industries
Against the backdrop of the proactive policies being implemented in other parts of the world, Europe is witnessing a deterioration of its industrial base, which implies increasing unemployment and a risk of becoming dependent in many aspects on third countries. The deindustrialisation of Europe coupled with rising protectionism in rapidly industrialising countries pose serious risks for Europe as regards to the security of supply in strategic areas. “Europe urgently needs a clear vision supported by targeted policies for its manufacturing industries. The current approach based on fragmented and selective actions proved to be both costly and inefficient. Action is needed, before it is too late and before we lose our capacity to invent high-tech products which are necessary to rebuild the future European economy”, stresses Mr Martin Kapp.

Time to react
The austerity crisis in the Eurozone adds to the severity of the situation both in Europe and worldwide. The half-measures dictated by the political agendas have been only postponing the real solution of the problems. As a result, the access to money has dried up and is currently seriously hampering business and investments in many European countries, despite a real demand from customers. “We strongly urge the politicians to take decisive steps and ultimately solve the problems which have their roots back in the crisis of 2008 and 2009”, Martin Kapp said.

For more information visit www.cecimo.eu

Domestic orders holding up for Germany’s machine tool industry

In the first quarter of 2012, order bookings in Germany’s machine tool industry fell by 7 per cent. Domestic orders were 1 per cent down on the preceding year’s equivalent figure. Orders from abroad fell by 9 per cent compared to the historical highs of the previous year.

German Machine Tool Industry – Moderate fall in demand during the first quarter of 2012.

“Capacity utilisation is still holding up well in Germany’s industrial sector, which is investing in additional capacities for coping with its orders”, is how Dr. Wilfried Schäfer, Executive Director of the sectoral organisation VDW (German Machine Tool Builders’ Association), Frankfurt am Main, comments on the quarterly result.

Europe goes well
“European demand, too, is still looking good”, is Schäfer’s verdict. Though the debt crisis is being reflected in declining orders from Southern Europe, he added, while other European countries like the Scandinavian nations, the United Kingdom or France have continued to place substantial orders, a trend already foreshadowed at the METAV 2012, the international trade fair for production technology and automation held in late February, where exhibitors had confirmed a continuingly high propensity to invest in Europe’s industrial sectors.

5% growth
The order backlog, at 9 months in February of this year, is at a similar level to October of last year. Capacity utilisation, at 95.1 per cent in April 2012, was likewise almost unchanged. In February of this year, the sector was employing 68,200 people, 6.4 per cent up on the preceding year’s equivalent figure. “The German machine tool industry is still performing well. By reason of the order backlog, a rise in production output for 2012 is virtually assured”, predicts Schäfer. The VDW is forecasting growth of 5 per cent. Though demand is quietening down, he added, this has already been factored into the pricing, and will give the companies a breathing space for addressing strategic issues, like expanding their business operations in Asia.

De-industrialisation may wipe out Europe’s innovation capacity

The European Association of the Machine Tool industries, CECIMO, launched its ‘Study on the Competitiveness of the European Machine Tool Industry’ with a roundtable meeting at the European Parliament on 21 March, which brought together industry and Members of the European Parliament (MEPs). Prepared by a voluntary group of industrialists coordinated by CECIMO, the study provides a comprehensive snapshot of the European machine tool industry in the post-crisis era.

Michael Hauser, Vice-President of Cecimo and CEO of Tornos.

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The event was titled: “Made in Europe? Challenges facing the EU’s machine tool industry”. The findings of the CECIMO study reveal that the share of European machine tool production has been in decline over the last decade, owing mainly to the shift of markets to Asia. “Driven by the rise of China, Asia has become truly ‘the factory of the world’ over the past decade. Today, Asia consumes more 66% of the world’s machine tool production and China alone absorbs 50% of this. The share of European consumption in world consumption has dropped from 40% to one fifth over the last decade, the share which was obviously lost to Asia” explained Michael Hauser, Vice-President of CECIMO, CEO of Tornos S.A. to MEPs present in the meeting.

“Mission impossible”
Machine tools are the basic building blocks of the industrialisation of a country. Emerging countries increasingly invest in production systems provided largely by the European machine tool industry to build up their manufacturing base. “This is good news for our companies as their exports to China and Asia are booming. However, the bad news is that our customers relocate outside Europe and we are forced to follow them to other markets. Expanding to Asian markets is almost ‘a mission impossible’ for an SME employing a hundred people”, the CECIMO Vice-President stated.

You can download the whole report here.