Slight easing of supply bottlenecks Machine tool orders in Germany holding up well
Orders for German machine tool manufacturers have held up well so far, despite all the adverse factors. Although the growth is clearly slowing, both September and the third quarter as a whole were positive, says Dr. Wilfried Schäfer, Executive Director of the German Machine Tool Builders' Association (VDW).
Orders received by the German machine tool industry in the third quarter of 2022 were nine percent up on the previous year's figure. Orders from Germany rose by three percent whereas those from abroad were up by twelve percent. Demand rose by 26 percent in the first nine months of 2022. Domestic and foreign orders contributed in equal measure to this, accounting for growth of 25 and 26 percent respectively.
However, there was an eight percent increase in producer prices in the machine tool industry in the third quarter. The effect of this was that earnings stagnated on a price-adjusted basis. “As we are seeing everywhere, inflation is eating away at our growth,” VDW boss Wilfried Schäfer says. Orders for the year as a whole are nominally only nine percent below the record volume posted in 2018. This record level has been matched abroad, however the figures from the domestic market are one fifth below it.
At the same time, capacity utilisation rose to just over 90 percent this October. “The supply bottlenecks are now easing slightly, it seems,” Schäfer says. This is evident from sales, which have also increased by a gratifying ten percent in the first nine months. Machining is the larger sector in the machine tool industry, and with its heterogeneous customer base it is outpacing the forming sector here, posting a 17 percent increase. Forming is dominated by the pressing sector; it is often used in large-scale projects and is characterised by less prominent cyclical swings. Sales here are down six percent in the first three quarters of the year. However, this can be explained by the strong base from the previous year. Forming technology grew by a fifth in 2021, while for machining the figure was only three percent.
The sector expects to see orders cool noticeably in the fourth quarter. Germany and Europe in particular are lagging behind, while Asia and America, which have been little affected by the energy crisis, are expected to perform more solidly. “Nevertheless, we will finish the year with overall growth in production,” says Schäfer, summarising the outlook. The sizable backlog will ensure that production remains high, as it takes time to process the orders, he explains.