Order intake in Germany This is how the German machine tool and metal forming industries are doing
Germany — The German Machine Tool Builder's Association presents the figures relating to order intake in two divisions of the German mechanical engineering industry, shedding light on developments in the first quarter of 2022.
In the first quarter of 2022, order intake in the German mechanical engineering sector rose by a solid double-digit percentage compared to the same period last year. In machine tool manufacturing, order intake increased by a healthy 44 percent in the first quarter, the German Machine Tool Builder's Association (VDW) continues. Orders from both Germany and abroad increased by 44 percent in equal measure. During this period, order intake in the German metal forming industry in particular rose by 26 percent compared to the same period last year. Orders from Germany rose by six percent for the forming specialists and orders from abroad by 37 percent. Last year, forming technology accounted for around 27 percent of the total production of German machine tools, as analysed by the VDW.
Metal cutting and forming heading back to 2018 record levels
“In the first quarter of this year, orders for the two segments of our industry, machining and forming, continued to go strong,” said Dr Wilfried Schäfer, managing director of the VDW, commenting on the encouraging result. According to the report, they were only eight percent below the record year of 2018 overall. However, it is to be expected that the effects of the Russia-Ukraine war will cloud the picture somewhat in the coming months. This is not a glass-ball assumption, but is indicated on the one hand by the significantly lower growth rates at the current margin and on the other hand by the still existing problems of the supply bottlenecks, which are not expected to be resolved soon.
According to Schäfer, the supply bottlenecks are also the reason why production continues to lag very strongly behind incoming orders. In the first quarter, production rose by only six percent, a disproportionately low increase. For this reason, the VDW has revised its production growth forecast for the current year downwards from 14 to eight percent. For many machines, some components are missing to complete them. They are only considered “produced” when they are on their way to the customer.
China! The great unknown in the economic game
The lockdown in many large cities and industrial hubs is currently preventing customers from receiving machines and service staff from arriving. According to the VDW, exports are also languishing in a similar way to production. They rose by only one percent. Europe and America are down slightly, by two and one percent respectively. Asia, on the other hand, is growing by eight percent, with Central and South Asia as well as South-East Asia increasing much faster than East Asia. Exports to China, the largest sales market, also grew only moderately at the beginning of the year, by four percent. China accounts for around 19 percent of German exports.
German machinery exports to the rest of the world
But at 13 percent, a much smaller share of sales goes to the US market. Exports to the USA therefore fell by six percent in the first quarter.
Italy is in third place in the ranking of the ten most important sales markets with a plus and a share of six percent each. After a poor previous year, business with Switzerland has fortunately recovered noticeably with a 70 percent increase in the first quarter. This brings it back to fourth place in the ranking.
Exports to Austria are down again compared to the very strong first quarter of 2021. Exports to Poland only just miss the previous year's level. The Netherlands continues to perform strongly and ordered eleven percent more machine tools in the first quarter than in the previous year. France continues its downward slide and declines by 18 percent. Mexico and Turkey complete the top 10 and stand out positively with double-digit growth rates of 27 and 26 percent respectively.
Imports grow by a total of 20 percent, driven by Switzerland, Japan and China, whose deliveries have increased significantly.
Huge challenges, but there is hope!
“All in all, the uncertainties for the economic development of our industry are still huge,” Schäfer has to admit. A prolonged war in Ukraine, further soaring prices for energy, logistics and raw materials as well as a complete stop of oil and gas deliveries from Russia would have a significant impact. But of course the high order backlog in the books keeps the business from collapsing. Schäfer sees a chance that part of this year's growth loss will turn into turnover next year. International machine tool consumption, which is estimated at a plus of ten percent for the current year, could also blow wind into the sails of machine tool building and forming technology.