According to VDW (German Machine Tool Builders' Association) estimates, machine tool production grew in Germany by 10% last year, three points more than had been expected in the fall. This corresponds to a real increase of 3% and a volume of around €14.1bn.
VDW is expecting production in the machine tool industry to grow by 9% this year to a volume of €15.5bn which in nominal terms, is only 10% below the record result of 2018.
At the annual press conference in Frankfurt am Main, Germany, Franz-Xaver Bernhard, chairman of the VDW, said: "We have largely overcome the effects of the pandemic. This is reflected in the growth in production and in the order levels, which are only just short of the record result of 2018.“
The industry has entered the current year with a significant backlog of orders. Even though the gap between orders and sales is currently closing, the German Federal Statistical Office is still reporting a 12-month backlog of orders for the machine tool industry.
Following a weak previous year, domestic sales grew by 16%, more than twice as fast as exports at only 7%. Europe came last within the Triad, at minus 3%. Eastern Europe performed particularly weakly because trade with Russia has largely collapsed. Cumulatively, German shipments have declined by nearly 80% since 2018. Italy has performed exceptionally strongly in the past two years, driven by a substantial subsidy policy for the purchase of machinery.
Exports to Asia rose by 11%. There was strong growth in exports to Thailand, India, Japan and South Korea in particular. China was the main driver the year before. In 2022, the zero Covid policy made machine deliveries more challenging. Some exports were replaced by local production.
Finally, the Americas were the main driving force with a 24% increase, driven by Brazil, the USA and Mexico. As the second largest market, the USA is gaining in importance and, accounting for an export share of 14.7%, is closing in on China, at 18.7%.
Meanwhile in the US, new orders of manufacturing technology totalled $434.1m in December 2022, according to the latest U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology.
December 2022 orders were down 1.7% from November 2022 and down 27% from December 2021. Total orders for all of 2022 came to $5.54bn, a 6% decrease from total orders in 2021.
“For yet another month in 2022, and now for the whole year, we can report that while orders were down, the manufacturing technology industry is doing great,” said Patrick W. McGibbon, chief knowledge officer at AMT.
“The industry recorded its third-best year in 2022. Despite the reduction in orders from 2021, it is hard to find a negative story about the manufacturing technology industry. The recession that pundits have been predicting for months is now being termed a ‘rolling recession,’ where some industries grow while others contract at different rates. We in the manufacturing industry call that business as usual, and 2022 proved no different.”
The continued demand for capacity from domestic manufacturers was a critical driver in the success of 2022. Machine shops generally account for the largest share of orders in a given month, and their level of investment can be seen as a leading indicator of economic conditions.
While they have modestly decreased orders from 2021 levels, machine shops are still nearly 23% over their 2019 order levels. Likewise, agricultural machinery manufacturers decreased orders in 2022 after a dramatic increase in 2021; however, the 2022 orders are still more than double their 2019 levels. Investment from the aerospace sector is situated for growth in 2023. While consistently growing the last two years, the annual averages between 2020 and 2022 are still about 7% short of their 2019 investment.
UCIMU in Italy has reported an “excellent” 2022 for the Italian industry of machine tools, robotics and automation and predicts that in 2023, the positive trend will continue.
After an extremely positive 2021, the Italian industry of the sector is closing the year 2022 with double-digit increases for almost all main economic indicators. Moreover, a favourable 2023 is expected, although with lower growth rates.
This is in brief what was reported by Barbara Colombo, president of UCIMU UCIMU-SISTEMI PER PRODURR, the Italian machine tools, robots and automation systems manufacturers' association.
In 2022, production reached €7.255bn, marking a 14.6% upturn versus the previous year.
The outcome was due to the excellent trend of Italian manufacturers’ deliveries to the domestic market, grown by 27% to €3,980 million, as well as to the positive performance of exports, which reached €3,275 million, 2.5% more than in the previous year.
The Italian demand for machine tools, robots and automation systems was really dynamic in 2022 - as it had been in the previous year. With a 31.3% rise, domestic consumption went up to €6,575 million, driving not only the deliveries of Italian manufacturers, but also imports (€2,595 million, +38.5%).
The major destination markets for the Italian product offering of the sector were the United States (€281 million, +24.7%), Germany (€199 million, -15.6%), China (€122 million, -3.5%), Poland (€111 million, +4.7%), France (€105 million, +9.1%). The export/production ratio decreased by about 5 percentage points, accounting for 45.1%.
Despite the factors of uncertainty that are troubling the contest, UCIMU said the positive trend should also continue in 2023. In particular, according to the forecasts carried out by the Studies Dept. & Business Culture of UCIMU, in 2023, production should rise to €7,565 million (+4.3% versus 2022), thanks to the upturn registered by exports, which should amount to €3.375 million (+3.1%) and thanks to the manufacturers’ deliveries to the domestic market, expected to increase by 5.3% to €4,190 million.
Even consumption should keep on growing, totalling €6,820 million, corresponding to 3.7% more than in 2022. Although to a lower extent compared with manufacturers’ deliveries, imports should also benefit from the dynamism of domestic demand, marking a 1.3% increase, which should bring their value to €2,630 million. The export/production ratio should drop again, standing at 44.6%.
The confirmation that the growth reported in 2022 will continue in 2023, as highlighted in the forecasts, is also evidenced in the analysis of the Italian manufacturers’ order portfolio, which in the first nine months of the year (latest available data) shows 8.1 months of production guaranteed by orders, the highest value ever registered over the last 30 years.
