According to data released by Cecimo, the European Association of Machine Tools Industries and Related Manufacturing Technologies, despite the geopolitical difficulties and other factors affecting the economy, the European machine tool sector has grown by 11.6% in 2021 and the recovery will continue in 2022 .
The number of machine tools in Europe
As expected, Cecimo’s estimates for machine tool production confirmed a strong recovery in the sector with an increase of 11.6% in 2021 compared to 2020 levels.
This is a significant growth, albeit lower than that recorded by the sector globally, which in 2021 reached a value of 72.1 billion euros, an increase of around 19.7% compared to 2020.
Marcus Burton, chairman of Cecimo’s Economic Committee, stressed that “despite the uncertainty in the global market, Europe remains the world leader in machine tool production, with a value reaching around € 22.6 billion in 2021.” , i.e. about a third of world production.
Estimate for 2022
Despite the current problems related to supply chain disruptions and new geopolitical problems, Cecimo still expects a further recovery of the sector in 2022.
Preliminary estimates indicate that machine tool production in the Cecimo countries will increase by around 12% this year.
Domestic demand, which according to the latest Oxford Economics forecasts is expected to grow by 19%, will be mainly satisfied by the productions of the producers in the Cecimo area, while imports should grow by 12%.
In terms of exports, Cecimo expects growth of around 9% in 2022. Regarding the Russian question, the association emphasizes that “we do not anticipate a significant impact of the recent sanctions against Russia on Cecimo’s trade balance and exports, as the Russian market is already drastically reduced due to the previous sanctions ”.
Orders for the first quarter of 2022
The growth expectations for 2022 are also supported by the strong order intake in the first period of the year.
The Preliminary Index of Cecimo’s Total Orders8 (a combined index of domestic and overseas orders from the eight major Cecimo machine manufacturers, ie Germany, Italy, Switzerland, Spain, Austria, France, the United Kingdom and the Czech Republic) for the first quarter of 2022 increased by 25 % compared to the previous quarter and by 14% compared to the same period last year.
Despite the difficulties encountered by the industry, Cecimo generally expects stable order levels in 2022.
Open challenges, from the automotive industry to skills
Tool manufacturers are concerned about the issue of the transition from the production of electric vehicles to internal combustion vehicles, which would have a significant impact on the industry.
In terms of market dynamics, the recent closures in China due to the pandemic have generated new bottlenecks in the supply chain. “While our manufacturers are experiencing very high order levels, supply problems are causing an increase in backlogs. At the moment, however, we are seeing a relaxation of the measures against the pandemic, especially in China, and we expect supply problems to subside by the end of the year ”.
In addition to supply chain disruptions, rising energy prices and inflationary pressures, the shortage of skilled labor also continues to undermine the sector’s competitiveness. The association demands “new strategies”. In this regard, Heinz-Jürgen Prokop, President of Cecimo, emphasized that: “… in order to maintain our competitiveness and global leadership, European producers more than ever need a coordinated approach with policy makers to address skills gaps and develop new strategies to build more resilient supply chains “.