Slower pace for German machine tool orders

Dec. 22, 2011
Frankfurt am Main, Germany – Following the turbocharged upturn of the past few months, the German machine tool industry is once again sailing into calmer waters. In the third quarter of 2011, order bookings rose by 29%.

Frankfurt am Main, Germany – Following the turbocharged upturn of the past few months, the German machine tool industry is once again sailing into calmer waters. In the third quarter of 2011, order bookings rose by 29%.

Domestic orders rose by 33%, export bookings by 27%. Overall, demand was up by 74% during the first nine months of 2011. Domestic customers’ demand was up by 71% on a like-for-like basis, while the corresponding figure for customers abroad was 76%.

“The increase in order bookings for the ongoing year continues to be excellent," confirms Dr. Wilfried Schafer, executive director at the VDW (German Machine Tool Builders’ Association). Nonetheless, he adds, the growth dynamic is slowly decelerating on a quarterly comparison. Following months of two- to three-figure growth rates, he continues, a normalization trend had been foreseeable. Since the beginning of the year’s second half, the figures have been reflecting the baseline effect of a significantly stronger reference period over the course of 2010.

The good order situation has once again upped the level of capacity utilization. The most recent figure of 95.5%, for October of this year, means companies are operating at well-nigh full capacity. A comparison with the preceding year, when capacity utilization was averaging 75.4%, vividly illustrates the challenge the sector is facing. The sector’s total workforce came to 66,865 employees in September of this year, 4.4% more than the preceding year’s figure.

The official production result for Germany’s machine tool industry, according to the provisional figures, rose by 36% in the first nine months of the current year. "Over the year as a whole, we look like we're doing better than hitherto expected," explains Schafer. The VDW, he continues, is now predicting production output to grow by one-third for 2011.

However, in view of the continuing uncertainties on the financial markets, and not least the euro’s debt crisis, companies’ expectations for the months ahead are gloomier across the board.

"These exogenous factors are superimposed on the normal cyclical demand trend," reports VDW-Chef Schafer. However, he continues, the effects on turnover developments in the various companies will depend very closely on the structure of their product portfolio and their customer base. For vendors of customized machines, in particular, and those operating in project business with long lead times, the high order backlog of most recently almost ten months, together with the continuing need for capital investment in the automotive industry and among its system suppliers, plus strong demand from energy utilities and aircraft manufacturers, all combine to produce a stabilizing effect.

The German machine tool industry ranks among the five largest sectors in the country’s mechanical engineering segment. It supplies production technologies for metalworking applications to all categories of manufacturer, and makes a crucial contribution towards progressing innovation and productivity in the industrial sector overall. Due to its absolutely key position for industrial production output, its development is also an important indicator for the economic vigor of the country’s industrial sector as a whole. In 2010, the German machine tool industry produced machines and services worth around 10 billion euros, and was employing 64,100 people (firms with more than 20 staff).

About the Author

Industrial Laser Solutions Editors

We edited the content of this article, which was contributed by outside sources, to fit our style and substance requirements. (Editors Note: Industrial Laser Solutions has folded as a brand and is now part of Laser Focus World, effective in 2022.)

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