Sector performance German machine tool output to fall; precision tool growth flat: VDMA

Editor: Eric Culp

Weak sales in Germany reduce expectations for machinery production.

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The VDMA was forced to lower its predictions for machine tool growth due to weak demand at home.
The VDMA was forced to lower its predictions for machine tool growth due to weak demand at home.
(Source: Culp)

Germany’s VDMA engineering federation has cut its forecast for the country’s machine tool production from a growth rate of 2% to a 1% contraction after domestic orders in the first five months of this year eased. The federation confirmed its prediction from earlier this year of no growth for the German precision tooling industry, which set a production record of €8.8 billion in 2012 on growth of 4%.

The support required for ramping up production in the machine tool sector failed to materialise this year, according to VDMA President Thomas Linder. “Since the announcement of our prediction in September 2012, important underlying data have developed less dynamically than we expected. We no longer believe our target of repeated growth can be realised in the current year.”

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The VDMA reported that production fell 3.4% in the first four months of 2013. In order to attain the originally forecast production increase of 2%, German suppliers would need to raise their output sharply in the second half, an unlikelihood considering the current dearth of orders, the federation explained.

Price-adjusted orders for German machine tools in the first five months of the year were off 1% versus the same period in 2012, the VDMA said. Domestic orders dropped 6% while international orders gained 2%.

Precision toolmakers see markets change

Markus Heseding, the new managing director of the Precision Tools Association at the VDMA, said the ups and downs on the international market will balance each other out. “We expect that the growth in China and the US can offset the weaknesses in other markets.” He added that demand in Germany and the other most important European markets has waned, but orders in the UK remain strong, as was the case last year.