German machine tools to post record output in 2014

Germany’s machine tool industry expects its production output to rise by 4 per cent in 2014 to what will then be around 15.1 billion euros. “This means the previous production output record will be broken yet again”, reports Martin Kapp, Chairman of the VDW (German Machine Tool Builders’ Association), speaking at the annual press conference in Frankfurt am Main on 6 February 2014.
2013’s sectoral record already exceeded
Last year, the sector had already exceeded its previous record high, with growth of 2 per cent to 14.5 billion euros. The good result is attributable primarily to the high order backlog of more than eight months at the beginning of the year. “Despite shrinking order bookings, it ensures good capacity utilisation of almost 93 per cent averaged out over the year”, says Kapp.
In addition, increased production output is also owed to forming technology, which contributes about 30 per cent to the overall result. By reason of large-scale projects with its principal customer grouping, the automotive industry, it is not so sensitive to cyclical fluctuations as metal-cutting technology, the second major category in the machine tool industry. The production output of forming technology thus showed a concomitant rise of 14 per cent, whereas metal-cutting showed a slight fall of 1 per cent.
The machine tool industry’s performance was underpinned by the domestic market. Following two years of marked caution, domestic consumption of machines rose by 5 per cent. Exports, by contrast, showed a decrease, down by 4 per cent, though starting from their high point in 2012. The paramount adverse effect came from the shrinking dynamism of the biggest export market, China. From January to November 2013, exports to the People’s Republic fell by 11 per cent. This was the first time following twelve years of uninterrupted growth that deliveries had fallen. 

German machine tool production output in the whole world continues to grow
Nowadays, many German manufacturers of machine tools are also operating production facilities in their most important markets, so as to be close to their customers. In 2012, according to a survey commissioned by the VDW, production output abroad has increased by more than a fifth compared to the preceding year, at 2.03 billion euros. Measured against the total production output of the survey’s respondents, that is almost 31 per cent. In the past decade, production output abroad has thus more than doubled. “The sector is upgrading its structures so as to survive and prosper even under the conditions being created by globalisation”, comments the VDW’s Chairman. 

Germany upgrades its position on the global market
In 2013, worldwide production output of machine tools fell by 13 per cent on a euro basis. Germany is numbered among the very few in the ranks of the major vendor nations that have achieved actual growth. So in the global production rankings, the sector won the silver medal, behind the world champion China, but in front of the perennial competitor Japan. 

This latter was very far from unscathed: production output in Japan itself shrank by 35 per cent. About half of this figure is attributable to the devaluation of the yen. What is called “Abenomics”, with which the Japanese central bank sent the yen’s exchange rate plummeting, has so far not significantly boosted exports of machine tools. JapaneseNike Hypervenom Phantom II FG