Sector Demand German machine tool orders down nearly one-fifth in Q1

Editor: Eric Culp

Demand for metal cutting equipment showed particular weakness.

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The VDW said it hopes the EMO metalworking exhibition in September will help spark machine tool orders in H2.
The VDW said it hopes the EMO metalworking exhibition in September will help spark machine tool orders in H2.
(Source: Deutsche Messe)

Orders for Germany’s machine tools fell by 19% versus the year-earlier period, according to the country’s association of machine tool builders VDW. It said domestic orders dropped 21%, and orders from abroad slid 18%. (See chart for historical orders and sales in photo gallery.)

VDW Executive Director Wilfried Schäfer explained that the market continues to remain soft. “Demand for machine tools is still lacking momentum.”

Gallery

He noted that the weak start to the year signals a perceptible degree of scepticism, including among mid-tier customers in Germany.

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Order bookings in metal-cutting applications, for instance, which have a broadly diversified customer base, were off 26% compared to the same period last year. This contrasted with forming technology, which is dominated by project business within the automotive industry. Its orders are still running at the previous year’s level, the VDW said.

Schäfer said the industry has the rest of the year to pick up the slack. “The year’s second half now has to provide a counterweight, if the predicted growth in production output of 1% is not to be put at risk.” Expectations are again focused on expanding markets outside Europe, the association said. In China, particularly, by far the biggest market for the German machine tool industry, faster economic growth is again being forecast. North America, most recently a vital support for the sector, will remain a stable market this year as well. Russia, finally, thanks to its substantial need for modernisation in its domestic industrial sector, likewise continues to be an attractive customer.

There are also rays of hope from the international automotive industry, which is deploying strategic investments in the battle for market shares, and from the aircraft industry and the mechanical engineering sector, the VDW said. All of these industries are exprected to make above-average capital investments in 2013.

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