Global machine tool business set to gather momentum in EMO

“Experts expect networking to trigger a quantum leap forward in terms of improving productivity and competitiveness among users in all sectors,” reports Dr. Wilfried Schäfer, Executive Director at the VDW, speaking at the EMO’s press conference in Chicago on March 9, 2017. This could also trigger an upturn in capital investment, says Dr. Schäfer.

International machine tool consumption to pick up again in 2017

Adversely affected by numerous international crises, however, the global economy is currently in a relatively cautious phase. This applies to GDP, industrial production output, capital investment in the major user sectors for machine tools, and thus international machine tool consumption as well. According to the VDW’s relevant statistics, the global market in 2015 totalled 68.3 billion euros. For 2016, the British research institute Oxford Economics, the VDW’s forecasting partner, is predicting a fall of 1.7 percent. The market in Europe stands out as the best performer, driven primarily by the Southern Europeans, Turkey, Spain and Italy. The UK’s industrial sector was in 2016 severely affected by Brexit. Machine tool consumption is predicted to fall by almost a third. Russia’s industrial sector, too, is still a long way away from a meaningful recovery. Here, once again, a decrease in machine tool consumption is predicted, this time by one-fifth. Asia is likewise downsizing its consumption. Only Japan and India are showing a plus. Bringing up the rear in 2016 were the Americas. This is primarily attributable to what continues to be a very difficult situation in Brazil, which cannot be offset even by the good performance of Mexico.

For the EMO year of 2017, economic pundits are anticipating an improved situation, with investments rising by 1.5 percent and machine tool consumption by 2.1 percent. Europe is expected to top the rankings again, with an increase of 4.1 percent. The principal drivers continue to be the southern European nations Italy and Spain but France as well, all three of them major machine tool markets in Europe. Some markets of Eastern Europe, too, are boosting this trend. Asia and America can achieve only an under proportional rise in their machine tool consumption during 2017, of 1.7 and 0.9 percent respectively, but will at least be turning a minus into a plus.

The U.S. automotive industry, aircraft and mechanical engineering sectors are looking for state-of-the-art production technology

The U.S. economy has recorded a continual uptrend for seven years now, driven primarily by private consumption. Investment activity in the nation’s industrial sector, by contrast, is sluggish. Important sectors like mining, oil- and gas production are at present in a phase of consolidation, according to gtai (Germany Trade & Invest), an important source for observing developments in the global economy, capacity utilisation is in many parts of the U.S. industrial sector unsatisfactory. Falling corporate profits and weak demand from abroad are causing genuine concern.

The automotive industry, by contrast, is doing well. Sales of cars, SUVs, and other light vehicles are reaching record levels. It’s not least the favourable petrol prices, attractive financing conditions and moderately rising incomes that are boosting sales. With the trend towards downsizing, new technologies are being adopted on a broad front in the U.S. automotive industry, like turbocharging, direct fuel injection or start-stop systems. Thus capital investments are pre-programmed, which can be prepared to optimum effect at the EMO Hannover 2017.

Eighty percent of the vehicles sold in the U.S. are manufactured there as well. So leading-edge production technology is much in demand in the nation’s automotive factories. There is also plenty of catching up to do. This is why almost all producers have announced major projects for modernising and upsizing their capacities. According to Oxford Economics, the U.S. automotive industry will be increasing its capital investment by 1.0 percent in 2017. Technologies for reducing fuel consumption, and lightweight components, are much in demand .The focus here is on machining aluminium, combinations of lightweight materials, and carbon. This also applies, by the way, to aircraft manufacturers, who intend to invest 5.6 percent more this year. High-quality, sophisticated production technology for these applications will be showcased at the EMO Hannover 2017.

Demand for machine tool is also being substantially boosted by parts of the U.S. mechanical engineering sector. Investment is predicted to come especially from producers of food and packaging machinery, textile and plastic processing machines.

U.S. and Germany are close partners when it comes to machine tool business

The U.S. imported more than 60 percent of its machine tool consumption, totalling around 7.5 billion euros, in 2015. With a share of 16 percent, the Germans rank 2^nd among the major supplier nations concerned, after Japan. From a German viewpoint, in 2016 the U.S. was the second-most-important export market, with a share of almost 12 percent. Machines, parts and

accessories worth just under 1 billion euros were supplied, corresponding to an increase of 11 percent. Demand was chiefly for parts and accessories, machining centres, bending machines, laser systems and grinding machines.

“The German machine tool industry is very well anchored among the major American automakers, their component suppliers, the aviation industry, and the mechanical engineering sector,” explains VDW expert Dr. Schäfer. “We also, however, want to encourage the numerous mid-tier and relatively small users of machine tools to find out at the EMO Hannover what else the world of metalworking has to offer.”

“The U.S. manufacturers of production technology also need to intensify their focus on international markets,” continues the VDW’s Executive Director. Their position on the global market demonstrates how internationally competitive they are. With a volume of almost 5 billion euros, and a share of more than 7 percent, they rank among the Top 10 of the most important manufacturers worldwide. They export around 43 percent of their production output. According to the VDW’s global statistics, most recently in 2015 exports had increased by a tenth.

Deliveries to Germany fell by a double-figure percentage in 2016. Germany ranks 6^th among the most important markets for U.S. equipment manufacturers. The U.S. ranks 8^th among the most important suppliers for Germany’s industrial sector: in 2016, machines worth round 120 million euros were imported to Germany from the U.S., primarily parts and accessories. U.S. manufacturers would accordingly be well advised to use the EMO Hannover 2017 to position themselves as can-do vendors on the global market.