Positive Signs for European Machine Tool Industry

Emerging indicators point to a resurgence in the European machine tool industry in 2010, according to the economic committee of CECIMO, the European Association of the Machine Tool Industries.

At its May 18 general assembly in Leipzig, Germany, the committee announced that machine tool orders in member countries increased in the fourth quarter of 2009 after dropping by more than 50 percent in the first quarter of that year. However, order backlogs are still very low, so it will take some time before the turnaround is clearly observed in sales, the organization says.

The recovery is driven by increased consumption in emerging markets, most notably China. Despite the severe crisis in the sector in 2009, the global market share of machine tools exported from CECIMO countries rose from 55 to 61 percent. The organization expects that trend to continue in 2010 and says the increase speaks to the European sector’s competitiveness in global markets.

However, the organization adds that European consumption will take more time to recover because of low capital investment, below-average capacity utilization and difficulties with obtaining credit. Financial instability associated with the sovereign debts of some European countries might also hinder the cash flow that is necessary to invest in production equipment. This makes it necessary to obtain fair and non-discriminatory access to emerging markets in Asia and Latin America.

“The economic crisis has unfortunately led to a revival of some national reflexes, demonstrated by a surge in small-scale national intitiatives that are often more a hindrance than a help to boosting the economy,” says Frank Brinken, chairman of the economic committee. “Such obstacles, like recently introduced machine import regulations in South Korea, often take the form of additional, costly local certification, or of some significant delays in getting import or export licenses.”

For more information from CECIMO, visit cecimo.eu.