Industrial growth in 2017 was at its highest rate in the past three years, supported by robust global trade. As growth reached its peak, industrial activity also began to slow down. CECIMO expects a slowdown of industrial growth from 3.6% in 2018 to 3.2% in 2019.
Although the mood in Europe and US has recovered, CECIMO does not expect any future improvement in the economic sentiment. Leading indicators also point to an eventual slow down, but not in the US.
Global machine tool production should grow by approximatively 3.6% in 2018 and reach €81.9 billion. The global output of machine tool purchasing industries should rise by 5% this year, but decelerate to 3.1% in 2019.
CECIMO trade looks good for 2018. US tariffs were directed over the Pacific, rather than the Atlantic, when it comes to the machine tool sector. In the first semester, a 10% increase in exports of CECIMO-based companies was recorded. Estimates suggest that export volume will reach €21.3 billion, some 6.7% higher than in 2017. Based on 2018 data, the main destination markets for machines will remain as follows: China (27% of extra-CECIMO exports), the US (18%), Poland (8%) and Mexico (5%).
Based on internal figures, CECIMO machine tool consumption is expected to rise to €18.2 billion in 2018, which is 10.6% higher than last year. Colleagues from Oxford Economics are slightly more optimistic and predict a 13.9% increase in 2018 and 4.8% in 2019 for CECIMO. World consumption is expected to increase by 5.2% in 2018 and 3.8% in 2019.
Although trade disputes do not directly affect the machine tool sector, they impact business confidence and economic sentiment. Marcus Burton, chairman of the Economic Committee, said: “We need a strong global trade and investment impetus to support foreign demand and further growth for the European manufacturing sector. That implies having a co-operative attitude on a Brexit deal, transatlantic tariff disputes and fiscal stimuli from the national governments”.
The shift towards a circular economy calls for a prominent role for manufacturing. Machine tools are at the core of manufacturing and therefore also have a role to play in the shift towards a more sustainable sector. In this context, CECIMO delegates discussed how the sector is already contributing to the circular economy through improved product performance and by developing new, cleaner technologies, and embedding sustainability principles into everyday operations.
“Maintaining, refurbishing, continuous improvement, and upgrading and recycling are already common practices in the sector,” said Juha Mäkitalo, chairman of the CECIMO Technical Committee. “We should not be complacent, though. We need to continue building on the good work done by the sector to meet increasing demands for more energy and resource-efficient products.”
CECIMO is currently preparing a report on the contribution of the machine tool sector to the circular economy – including recommendations for policymakers and industry – to be published in early 2019. One of the key recommendations for policymakers, which is especially relevant to the current discussion on the new European research programme, is to support the development of new enabling technologies and facilitate access to research and development funds for manufacturing (and particularly SMEs).
Investing in R&D is essential to retain the competitiveness of machine tool companies and develop new, cleaner and more efficient technologies. It is important to promote the development of new technologies such as additive manufacturing, artificial intelligence and machine learning, which can enable the transition to a more circular economy.
Among the main recommendations to the machine tool sector itself, is the need to showcase best practices from the circular economy and real-life success stories from industry. Also included is the need to work more closely with customers and suppliers to improve product efficiency, remove waste from the supply chain, and create new and more circular business models and products which create added value for customers.