Machine tool industry
Incoming orders fall by 21 percent
Incoming orders in the German machine tool industry fell by 21% in the first quarter compared to the same period last year. There are many reasons for this.
In the first quarter, incoming orders in the machine tool industry fell by 21% compared to the same period last year. Domestic orders were down 10 percent and orders from abroad 27 percent. Incoming orders from Europe fell by only 3 percent. According to Dr. Wilfried Schäfer, Executive Director of the VDW, the reasons for the decline are due to "an extremely strong first half of 2018". According to the Association of German Machine Tool Manufacturers, the base effect will decrease significantly in the second half of 2019.
Weakening automotive industry
Reasons for the decline include politically induced disruptions in global trade, which are impacting emerging markets, China's weak growth, structural weaknesses in the automotive industry and the slump in the semiconductor sector. "The international automotive industry had already halved its capital expenditure in 2018 to less than 4% compared to the previous year and is likely to plan below this level in 2019," explains Schäfer.
Orders below sales
For the first time since mid-2014, orders for machine tools are once again below turnover. In the first three months of 2019, sales still increased by 6%. "Many companies are currently relying on the order backlog from the previous boom," says Schäfer. Delivery times that are too long are becoming shorter again. As a result, customers' procurement and suppliers' throughput times in plant production are becoming more flexible again. In April of this year, capacities were 86.5 percent utilized and remain below the average of the previous year.
Production growth expected for 2019
"Nevertheless, the VDW expects production to grow by 1% in 2019," confirms Schäfer. He expects demand to pick up in the second half of the year. The order backlog is also likely to continue for some time to come.
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