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More Data Shows Rising Machine-Tool Orders

Aug. 24, 2021
The German Machine Tool Builders' Assn. posted a 57% increase in year-to-date demand, and forecasts 2021 order volume will reach $15.5 billion.

"The industry has turned itself around with considerably more dynamism than was originally assumed and, despite some delivery difficulties, is posting strong increases in order levels," observed VDW executive director Dr. Wilfried Schäfer.

Further increases in machine-tool demand are expected, a development that is already reflected in current production levels. Oxford Economics, VDW's forecasting partner, estimates 2021 machine-tool production to grow at 8%, two points higher than the spring forecast held, for a current year new-order volume of €13.2 billion ($15.5 billion.)

"Nevertheless, there is still some way to go before we reach the peak result of 2018/2019," said Schäfer. At that time, the industry achieved a result of €17 billion ($19.96 billion.)

German machine-tool builders comprise one of the largest national groups in the global manufacturing technology sector, and one of the top-five specialty groups in that country’s mechanical engineering sector. In 2020, VDW member companies produced machines and services worth around €11.8 billion ($14.4 billion.)

During January-June 2021, new orders for machine tools from domestic buyers rose 38%, while foreign orders rose 68%.

VDW acknowledged that the high growth rates are partly due to weak demand during the first half of 2020, but also noted that order volumes have recovered noticeably and now are only slightly below the (pre-Covid) levels redcorded during 2019.

The current demand for new machine tools also is broad-based, VDW reported, demonstrating "great pent-up demand among investors from all over the world."

The greater part of the current demand is from Asia, and two-thirds of that from China.

U.S. demand for German machine tools is "starting to recover," VDW offered, adding that there "are increasing signs that U.S. orders are about to pick up more strongly. "

VDW indicated that European machine-tool has "revived noticeably, " in particular in countries (e.g., Austria, Italy) with investment-incentive program boosting demand.

"The German market is set to follow suit, albeit with a delay, " according to VDW. "Overall, however, the peak levels of 2017/2018 are not expected to be matched until next quarter."

"The picture would be even rosier without the bottlenecks and price increases in supplies of electronics, steel, and sheet metal etc.," Schäfer said.

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