The German Machine Tool Builders’ Association, VDW, anticipates that German machine tool production will drop by 40% this year. Following a five-year peak period of record-breaking numbers machines and services amounting to €14.2 billion were delivered last year 2009 output will probably be at the 1999 level.
Particularly over the past two years, our industry has experienced what can only be described as exceptional circumstances, commented Carl Martin Welcker, VDW chairman. He argued that faith in continuing market growth had caused international demand for manufacturing technology to rise to record levels recently, as many global corporations massively expanded their production capacity. This demand bubble was burst by the arrival of the financial crisis last year. Consequently, the German machine tool industry has experienced a dramatic decline in orders.
The machine tool industry nevertheless remains key to the revival of all forms of industrial production. For Germany as a production location, it is tremendously important to secure the chain linking users, equipment providers in the machine tool industry, and subcontractors or suppliers, said Welcker in outlining the challenge currently facing the branch.
Ultimately, the productivity and efficiency of this entire manufacturing supply chain is the foundation on which the competitiveness of the German economy depends. In the months and years ahead, Welcker continued, the important thing is to ensure that sufficient liquidity is available to medium-sized businesses, under affordable conditions, to finance not only orders but also R&D. This applies as much to its small to medium-sized customers as to the branch itself.
Addressing the political arena, Welcker emphasised that loan funds made available through economic stimulus packages should be readily accessible. The allocation process so far has been sluggish, and often further complicated by various processing banks having widely differing credit guidelines.
However, the VDW chairman is convinced that, once demand gathers momentum again, the branch will benefit. The German machine tool industry is well positioned internationally, he insists. A major advantage for the sector lies in the fact that it has already streamlined its processes and thus will be able to resume delivery swiftly. Companies offering cost-cutting innovations will be assured a role in the economic revival. |
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