GENERAL NEWS
Stable economic outlook for European machine tool producers
During its General Assembly recently in Tampere , Finland , CECIMO ( the European Association of Manufacturing Technologies ) reported a resilient performance for the European machine-tool sector in 2023 . Political and economic uncertainties at the end of the year resulted in a short-term fall in order intake in 2024 . However , an improvement in key economic indicators and falling inflation means that it expects orders to increase in the second half of the year .
CECIMO ’ s General Assembly is made up of delegates from national associations who must each represent a different company and , in an active management function , represent a manufacturing member company producing machine tools and related manufacturing technologies . These delegates are accompanied by the Director / Secretary of their national association . The General Assembly meets twice per year .
Economic outlook
“ The previous year has been characterised by mixed divergent trends . European machine-tool ( MT ) builders increased production levels by 7 % in 2023 , compared to 2022 . Strong production momentum was maintained throughout the year , reaching around € 27.2 billion in 2023 , maintaining a share of around 33 % of the global MT output . In addition , European MT builders ’ total machine-tool exports increased by around 23 % in the last quarter of 2023 compared to the previous quarter , while imports in Europe improved by around 5 % in the same period ,” outlined CECIMO .
The association confirmed that the United States and China remained the two main export destinations for European machinetool producers in 2023 ( the U . S . was in first place ). Japan , China and Taiwan remained the top three machine-tool supplying markets for CECIMO countries , added the association .
However , it also cautioned that these positive developments have also been balanced by unfavourable factors , highlighting that consumption levels in CECIMO countries declined by 1.8 % over 2023 and orders for Q4 2023 have been 16 % lower compared to the same period in 2022 .
Francois Duval , CECIMO President .
Marcus Burton , Chairman of CECIMO ’ s Economic Committee .
“ The European machine-tool industry has shown remarkable strength ,” commented Francois Duval , CECIMO President . “ Our resilience shows the industry ’ s ability to adapt and thrive in changing circumstances .”
Looking ahead
In 2024 consumption levels in CECIMO countries are estimated to decline by 1.8 %. In addition , preliminary statistics concerning CECIMO production levels revealed how CECIMO output will decline by 5 % in comparison to 2023 .
“ To exacerbate the situation , the negative impact of geopolitical tensions , supply-chain disruptions , weakening global demand and market volatility impacted the sector severely which experienced a shortfall in orders of 20 % down compared to the same period last year , in the first quarter of 2024 . However , preliminary indicators suggest a more favourable outlook in the upcoming period . Easing supply-side pressures ; improved economic factors ; higher confidence ; reduced risk of gas shortages and lower inflation rates suggest a moderate recovery throughout the rest of the year ,” said CECIMO .
This optimistic view is also enhanced by the fact that the Global Purchase Manager ’ s Index has been over the threshold of 50 index points since January 2024 , underlying a positive trajectory . CECIMO ’ s expectation is that the European Central Bank will continue to cut interest rates in the forthcoming period which is a further source for boosting the recovery . It expects consumption levels in CECIMO countries to grow by 6.3 % in 2025 and global consumption to increase by 8.6 % that year ( opening a window of opportunity for European machine-tool builders ).
“ This scenario illustrates how the [ next few ] months will be crucial for our European manufacturers , which will be determined by an increase in orders ,” added the association .
Order expectations
During the Economic Committee meeting , Chairman of the Economic Committee , Marcus Burton , commented on the outlook for new orders in Q1 2024 .
“ Despite the foreseen downturn in new orders throughout the first period of 2024 , there is a prevailing expectation of robust growth in orders in Q4 2024 . This recovery is expected to be driven by better economic conditions and by an upturn in consumption levels ,” he said .
Head Economist , Penna Urrila , from the Confederation of Finnish Industries , added : “ Even though inflation is slowly easing , together with interest rates and monetary policy , in the long run the risks that can negatively impact the European recovery relate to the new geopolitical reality and climate change .”
“ Future EU leaders should take bold steps to boost economic growth expectations , relaunch the EU economy and ensure a prosperous future for the European machine-tool sector amidst the geopolitical challenges and uncertainties linked to the U . S . presidential elections . By addressing these issues proactively , the EU can foster a stable and thriving industrial environment ,” concluded CECIMO . n
www . cecimo . eu
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