EU Machine Tool Builders Warn of “Ongoing Slowdown”

Nov. 28, 2012
2012 EU machine tool production to rise 6% Weak European demand offset by exports Call for action required on EU industrial policy

The European Association of the Machine Tool Industries (CECIMO)is forecasting its member companies’ 2012 sales will rise 6%, year-on-year, to €20.8 billion. The result is encouraging in light of the slowing demand that has followed a strong first quarter of 2012, and is attributed in part to a large backlog of orders being completed during the weaker second and third quarters.

The details were included in CECIMO’s statement following it recent annual meeting. Association incorporates machine-tool builders’ trade associations from 15 European nations, who represent approximately 1,500 industrial enterprises and more than 97% of all machine tool production in Europe, as well as about 33% of total global machine tool production.

CECIMO noted that the low volume of purchases “reflects the cautiousness of European businesses as well asthe low production activity, mostly in Southern-Europe.” It predicted that 2012 European machine tool consumption will decline by €77 million over the 2011 total.

Machine-tool trade groups in Germany and Italy have noted comparable results and made similar observations about weak European demand.

CECIMO reported that its exports rose to a near-record level of €16.7 billion in 2011, and that the successful results forecast for 2012 is based on solid growth in EU machine tool exports, which confirms the competitiveness of Europe’s machine tool builders.

“Due to the weak domestic markets, the European machine tool industry’s near-future growth prospects are based on high foreign orders’ intake and strong demand in Asian, North- and South-American markets,” according to CECIMO president Martin Kapp.

The Association cautioned that weak global industrial activity, in combination with the European circumstances, may jeopardize its members’ future export volumes and growth prospects. In that regard, CECIMO revived its call for more effective EU efforts to stimulate manufacturing activity.

The group also renewed its call for EU trade policy to support manufacturing exports, specifically identifying the importance of concluding a free-trade agreement between the EU and India. “CECIMO exports to non-European countries represented almost 50% of its total exports in 2011,” it stated, “and this share is growing, and free and fair trade is needed to maintain this momentum.”

CECIMO then drew attention to its member companies’ difficulty locating qualified workers, notwithstanding record-high unemployment rates in the EU. It endorsed the European Commission’s recent Industrial Policy Communication, which proposes plans to foster skills development for manufacturing, including initiatives to anticipate future needs for skilled workers in specific sectors, and to improve efforts to match education with available positions.

“The Commission’s target to increase the GDP’s share of manufacturing in the EU from 16% to 20% by 2020 is a quantitative expression of Europe’s reindustrialisation goal,” Kapp stated. “It underlines a long-term commitment to help prepare Europe’s manufacturing base for the future.”

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)