ISMR March 2022 | Page 43

German Machine Tool Industry Full order books at the end of the year

Total orders ( index , nominal ) 160

140

12 months moving average original values

120

100

80

60

40

20

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Note : Index basis shipments 2015 = 100 , data until December 2021 , Sources : VDMA , VDW

Following a rise of 2½ % in 2021 , calendar-adjusted real GDP may see even stronger growth in 2022 and 2023 , at just over 4 % and slightly more than 3 % respectively

“ This great result reveals how German manufacturers have worked their way out of the COVID crisis ,” said Dr Wilfried Schäfer , Executive Director , VDW ( German Machine Tool Builders ’ Association . “ Orders are also 11 per cent higher than in 2019 , the year before COVID ,” Schäfer added .

The German machine tool industry ranks among the five largest specialist groupings in the mechanical engineering sector . It provides production technology for metalworking applications in all branches of industry and makes a crucial contribution towards innovation and enhanced productivity in the industrial sector . Due to its key role for industrial production , its development is an important indicator for the economic dynamism of the industrial sector as such . In 2021 , with an average of 64,500 employees ( firms with more than 50 staff ), the sector produced machines and services worth around 12.7 billion euros .

According to the VDW , the recovery in overseas order levels is broadbased across all the different regions . Europe recorded the strongest growth at 90 per cent . The Americas and Asia were up 66 and 61 percent , respectively , on the previous year .

“ Within Europe , both Italy and Austria were supported by massive investment funding programmes and came back very strongly , as did the Czech Republic . While the level of orders from Austria only returned to normal in the second half of the year , the order level from Italy remained at a high level throughout the year .

Far left : Franz-Xaver Bernhard , Chairman , VDW . Left : Dr . Wilfried Schäfer , Executive Director , VDW ( German Machine Tool Builders ’ Association ).

The two lead markets , China and the USA , also performed strongly . Overall , however , the USA has shown stronger momentum and narrowed the gap to China ,” explained the association .

“ All in all , there are great prospects of the sector having a good year in 2022 ,” Schäfer concluded . “ We are expecting the wave of COVID-19 infections to weaken in the coming weeks and many restrictions to fall away . Most manufacturers also expect supply problems to ease in the second half of the year . In particular , the bottlenecks in the logistics chains should resolve themselves , allowing companies to process their orders and deliver their machines more smoothly .”

2022 machine tool outlook

“ 2022 has a good chance of being a successful year for the machine tool industry ,” said Franz-Xaver Bernhard , Chairman , VDW ( German Machine Tool Builders ’ Association ) recently . The industry has been experiencing a strong and broad-based upswing in terms of its markets and customer sectors since last year . A 14 per cent increase in production is forecast for 2022 .

“ The optimism for 2022 is underpinned by the strong growth in demand seen since the middle of last year ,” Bernhard explained . This testifies to the large pent-up demand for investment worldwide , a significant amount of which is being met by German-made machine tools . Orders received rose by 58 per cent during 2021 as a whole . A primary factor here was overseas markets , which posted a 62 per cent increase . Domestic orders also increased strongly by over half .

According to analyst Oxford Economics , global gross domestic product is expected to grow by 4.2 per cent in 2022 , industrial production by 4.4 per cent and investment by 4.3 per cent . In terms of investment growth , Germany ’ s triad of major customers is led by Europe .

“ We are set to benefit from this as many of our customers already have well-filled order books ,” said Bernhard . Some of the figures for Germany were even better . German industry is now catching up , following weaker development in the previous year . The two leading indicators , the Ifo business climate and the Purchasing Managers ’ indices , are also rising .

“ Nevertheless , the forecast for 2022 is still clouded by uncertainty ,” Bernhard acknowledged . Oxford Economics fears that large numbers of people will go into self-isolation and not travel because of the high Omicron variant infection rate , thereby inhibiting economic activity . Experience shows that the economy recovers quickly once the number

ISMR March 2022 | sheetmetalplus . com | 43