German machine tool industry under great pressure

Orders received by the Ger­man machine tool indus­try in the first quar­ter of 2020 were 25 per cent down on the same peri­od last year. Orders from with­in Ger­many fell by 22 per cent. 27 per cent few­er orders were received from abroad.

Glob­al demand for machine tools fell sharply last year due to var­i­ous chal­leng­ing fac­tors, but it fell still fur­ther at the begin­ning of the cur­rent year,” said Dr. Wil­fried Schäfer, Exec­u­tive Direc­tor of the VDW (Ger­man Machine Tool Builders’ Asso­ci­a­tion), Frank­furt am Main, com­ment­ing on the results. Only a pro­por­tion of the coro­na effect is cur­rent­ly vis­i­ble in the books, he point­ed out. It will take a few months before the full effect becomes appar­ent, explained Schäfer.

In the met­al cut­ting sec­tor, which serves a broad cus­tomer base, the decline in orders is more than dou­ble that of the more project-dri­ven met­al form­ing sec­tor. Domes­tic busi­ness here in Ger­many is cur­rent­ly offer­ing a small ray of hope. It rose by a sur­pris­ing 4 per cent in March. This was main­ly due to project busi­ness in the press-mak­ing segment.

The only region in which orders were up in the first quar­ter was Amer­i­ca, espe­cial­ly Mex­i­co. This was due to auto­mo­tive projects. Six of the top 15 mar­kets post­ed increased order lev­els. These were the USA, Mex­i­co, Rus­sia, Japan, Cana­da and the Nether­lands. “Rus­sia was once the third largest mar­ket for our indus­try. Eco­nom­ic sanc­tions, how­ev­er, have result­ed in a sharp decline in busi­ness. It is all the more grat­i­fy­ing to see a revival from Rus­sia in the cur­rent cri­sis,” report­ed Schäfer.

Sales rev­enue also fell – by 18 per cent – in the first quar­ter. “This is exact­ly in line with the 2020 fore­cast we issued in Feb­ru­ary of this year,” Schäfer con­tin­ued. “How­ev­er, it is already appar­ent that the order fig­ures do not reflect the full extent of the decline, which will even­tu­al­ly be even more severe. Capac­i­ty util­i­sa­tion in the indus­try also fell sig­nif­i­cant­ly by 18 points to 64 per cent
between Jan­u­ary and April. We cur­rent­ly expect the sit­u­a­tion to improve in the sec­ond half of the year, pro­vid­ed there is fur­ther scal­ing back of the lock-down arrange­ments and that pro­duc­tion returns to nor­mal. This will deter­mine where the indus­try will be at the end of the year,” he concluded.

Categories: 2020