German machinery sales hit record in 2015, but growth rate expected to slow

Date : 2016-08-11  | From :

Machinery sales for German plastics and rubber equipment producers may have hit a record in 2015, but the forecast is for more modest growth in the coming years.

For 2015, German machinery makers saw sales increase 4.7 percent in 2015 to hit a record 7.023 billion euros ($7.78 billion), according to VDMA number released in June.

That record comes after a somewhat slower 2014, when sales had dropped 1.1 percent compared to the previous year.

But VDMA Chairman Ulrich Reifenh?user predicted more moderate 2 percent growth for 2016 and 2017, which would bring sales up to respectively 7.2 billion euros ($7.98 billion) and 7.3 billion euros ($8.1 billion)

A study commissioned by VDMA in the fall of 2015 had indicated 3.2 percent annual growth in 2016 and 2017 for worldwide plastics and rubber machinery production, but no growth for German production in 2016.

These rather moderate forecasts made in June 2016 are based on stable demand in Western Europe and the U.S. Sales to Russia already have dropped as far as are expected.

India will present new opportunities, as will ending of sanctions in Iran, Reifenh?user stated. The forecasts also take account of an overall 4 percent increase in incoming orders in January-April 2016, compared with the same period in 2015. Within this, incoming orders rose 7 percent in Germany, 4 percent in the export markets and as much as 39 percent in the Eurozone.

Exports in core machinery were up 1.6 percent to 4.68 billion euros ($5.19 billion) in 2015, while imports were unchanged at 1.077 billion euros ($1.18 billion), accounted for mainly by Austrian and Swiss producers, both suffering slight declines after benefiting strongly from German domestic growth in 2014. In contrast, U.S. and Chinese producers did sell more machines in Germany in 2015. The domestic market grew by 7.4 percent after 3.4 percent growth in 2014 and 0.15 percent growth in 2013.

China maintained its lead in production value over Germany, accounting for 32.5 percent (down from 33.4 percent) of 33.9 billion euros ($37.6 billion) in world production value, against Germany’s 20.7 percent (up from 20.5 percent). Both leading producing countries were well ahead of the others: Italy (7.8 percent), the U.S. (7.2 percent) and Japan (4.5 percent).

Germany retained its world lead at 22.2 percent of 21.15 billion euros ($23.4 billion) of world exports, down from 23.7 percent in 2014, as China increased its share from 12.8 percent to 15 percent, a lower share due to its large domestic market absorbing much of its production, but narrowing the gap with Germany over recent years (2011: 10.3 percent). Italy, the U.S. and Japan lagged also with little change in 2015, at respectively 9.1 percent, 6 percent and 9 percent.

German machinery companies are ahead of China when it comes to exports to Thailand — and by a comfortable margin, Reifenh?user said. But Germany has only a marginal lead in Vietnam. Chinese machinery companies have the lead in exports to India and Japan.

Reifenh?user said Chinese producers tend to do better in developing countries “where processors are not very interested in high technology.” And although he called India “a low cost country,” he added that VDMA “sees large potential to get ahead of the Chinese again there in future.”

The U.S. was the largest destination for German machinery exports, up 15.3 percent to 719 million euros ($797 million) on the back of the country’s “re-industrialization and shale gas exploitation benefits,” he said. Although China as a destination was in second place, exports fell 19.3 percent to 653 million euros ($724 million) and the country has lost its previous first place, held since 2008, to the U.S.

After slight declines in injection molding machinery production value in 2013, followed by 9 percent growth in 2014, 2015 was an even better year, growth accelerating by 14.6 percent to 1.04 billion euros ($1.15 billion), while exports grew 6.9 percent to 839 million euros ($930 million).

Extruders and extrusion line production grew 9.4 percent to 1.1 billion ($1.2 billion), with 2015 exports accounting for 768 million euros ($852.9 million), up 25.6 percent. Blow molding machinery production was unchanged at 437 million euros ($484.7 million) in 2015, but vacuum and other thermoforming machinery grew at 18.6 percent to reach 270 million euros ($299 million), with exports rising 23 percent to 197 million euros ($218 million).