Economic situation and outlook European machine tool sector looks for stabilisation after two-year slowdown

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Cecimo European Commitee for the Co-Operation of the Machine Tool Industries

Jongen Werkzeugtechnik GmbH

Renishaw plc

DIPROFIL Diamantprodukter AB

During the Economic Committee meeting held in the framework of its General Assembly in Basel hosted by Swissmem, Cecimo, the European Association of Manufacturing Technologies, reviewed the challenges faced by the sector in 2026 and discussed the risks and opportunities ahead, in a context still shaped by political and economic uncertainty.

In 2025, the European machine tool sector continued to face a difficult economic environment, with weak demand and stronger global competition putting pressure on Cecimo member companies. European machine tool production is estimated to have fallen by around 6.6 percent down to 23.5 billion euros compared with 2024, showing that the slowdown has not yet eased.

This weaker performance is also affecting Europe’s position in the global market. In 2025, Europe’s share of world machine tool production dropped to around 30.8 percent, almost 2 percentage points below the previous year. The trend is particularly concerning when compared with 2023, when Europe accounted for 33.4 percent of global production. This means that Europe has lost nearly 3 percentage points of global production share in only two years, pointing to a gradual erosion of its industrial position.

Additionally, the European machine tool market showed clear signs of weaker activity when looking at consumption levels which declined by 3.7 percent compared with 2024, reflecting softer demand across European countries. Trade flows also moved downward: exports from European machine tool builders fell by 8.8 percent, while imports decreased by 4.2 percent. Main export destinations for European MT builders (excl. Europe) are the USA, China and India. Meanwhile, by looking at European MT import flows, Japan, China and South Korea continue to be the most significant suppliers.

Overall, these developments confirm that the sector operated in a difficult economic context, affected by slower investment, persistent uncertainty, geopolitical tensions and weaker momentum in both European and global markets. Together, these factors reduced demand for machine tools and negatively affected business conditions for Cecimo member companies.

A similar picture emerges when looking at order levels across the Cecimo8* countries. Domestic orders declined by around 1.7 percent in 2025 compared to 2024, marking the third consecutive year of contraction. By contrast, foreign orders increased by 1.2 percent in the same period, representing the first year of growth after two consecutive years of decline.

Cecimo projections for 2026 point to a modest improvement after two consecutive years of declining production and consumption in the European machine tool sector. Consumption and production levels in European countries are expected to increase, suggesting a possible stabilisation. Cecimo estimates for orders point to an improvement in total order levels across the Cecimo8 countries in 2026. However, this outlook remains fragile and exposed to external shocks and broader market conditions and should therefore be interpreted as a transition phase rather than a full recovery.

The sector will continue to operate in a highly uncertain environment, shaped by geopolitical tensions and conflicts, trade risks, possible tariff measures, energy market volatility and weak investment dynamics in key European economies. As European machine tool builders remain strongly exposed to international trade and industrial investment cycles, any deterioration in these conditions could limit the expected recovery and possible future rebounds.

At the same time, Cecimo sees some potential support from positive spillover effects linked to public investment and strategic sectors such as defence, aerospace, electrification, AI-related technologies and advanced engineering. These areas may help sustain demand for high-precision and advanced manufacturing solutions, but their impact will depend on timely implementation and the avoidance of further postponements.

A stable trade environment, stronger industrial investment and effective policy measures could mark the beginning of a gradual recovery for the European MT sector. Without these conditions, Europe risks further weakening its position in machine tool technologies, while global competitors continue to reinforce their industrial capabilities.

“The current situation confirms that Europe cannot take its industrial leadership for granted. European machine tool builders continue operating in a difficult environment, marked by softer demand, persistent global uncertainty and growing competitive pressure. While some opportunities may emerge from strategic sectors, Europe needs a stable policy framework, stronger industrial investment and faster implementation of measures that support advanced manufacturing.’’ commented François Duval, Cecimo President..

(*Cecimo8: Germany, Italy, Switzerland, Spain, Austria, France, United Kingdom, Czech Republic)

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