The European Association of the Machine Tool Industries (CECIMO) reports that its members’ machine tool orders started their ongoing recovery in the fourth quarter of 2009, having declined by over 50% year-on-year in the first quarter of 2009, as a consequence of the financial crisis. Michael Hauser, CECIMO president and GF AgieCharmilles CEO, explained, “since order backlogs are still very low, it will take a few more weeks before the turnaround is clearly observed in sales.”
CECIMO represents the national machine-tool builders associations in 15 countries in the European Union, European Free Trade Assn., and Turkey. With approximately 1,600 member companies, CECIMO claims to represent over 97% of total machine tool production in Europe and more than 40% worldwide.
European machine tool builders increased their global market share from 55% to 61% during 2009, and the Association expects this trend to continue in 2010.
It may take more time for European consumption to recover, however, because capital investment by their traditional customers remains low, capacity utilization is below average, and credit is difficult to obtain, especially for the smallest companies. Financial instability in Europe stemming from various sovereign debt crises may further hinder cash flow.
However, some positive indicators for the European market were detected by the planners of the just-completed Lamiera expo in Bologna, Italy. Organizers there reported strong attendance from visitors and nearly 450 exhibitors for the three-day event dedicated to machine tools and metal forming technology.
CECIMO said the rise of machine tool consumption in the emerging markets of Asia and Latin America makes it necessary for the European machine tool industry to gain more open access to those markets.
“The economic crisis has unfortunately led to a revival of some national reflexes, demonstrated by a surge in small-scale national initiatives which are often more of a hindrance than a help to boosting the economy,” stated Frank Brinken, chairman of CECIMO’s Economic Committee and CEO of the StarragHeckert Group. Recently introduced machine import regulations in South Korea, and other similar import regulations, add costs and delays to the process of securing import or export licences.
Free trade agreements, such as one now being negotiated by the EU with South Korea, would eliminate such non-tariff barriers. CECIMO has endorsed this agreement and two other European Commission free-trade initiatives, the European Strategy for the key enabling technologies and the EU 2020 industrial policy.