Europe: In Q1 2018, machine tool production and new orders reinforce reports of still widespread industrial demand in Germany and Italy.
Machine tool builders in two of the world’s biggest domestic industry markets—Germany and Italy, have reported sharper growth in order in the first quarter of this year, substantiating a similarly strong demand recorded by the US machine tool sector through most of the same period in 2018.
During the said period, the German machine tool industry for metal-cutting and metal-forming technologies were also strong—with capacity utilisation at 93.4 percent.
VDW—the German Machine Tool Builders’ Association, commented that its member companies are benefitting from the sustained demand across the major consuming sectors, resulting in a record-high production level of a seven percent increase and new orders through 2017.
For Q1 2018, German machine tool manufacturers recorded a 22 percent increase in new orders as compared to the same period in 2017. Domestic orders had a 39 percent increase, while foreign orders were up by 15 percent.
“Our sector is continuing to turn in a highly dynamic performance during 2018. Last year’s excellent performance is therefore progressing seamlessly,” said Dr Wilfried Schäfer, executive director at VDW. He also noted that this is consistent with the US machine tool orders.
“Based on sizeable increase in orders last year—which is set to continue—we see for 2018 as well potential for higher growth in production output than was still being anticipated in February, and are raising our production output forecast from five percent to another seven percent growth,” Schäfer added.
Italy’s machine tool sector recorded a more complex view during this period: total orders were down by 4.3 percent year-on-year, according to UCIMU—Sistemi per Produrre. However, absolute value of new order was up to 179.6 (2010 average = 100).
The trade association has accounted for the decline in orders with a weaker demand in the domestic market—which saw a 25.8 percent drop—and was offset to a certain extent by a 7.6 percent increase in foreign order volume.
“We are not worried about the slowdown in the orders collected in the domestic market. We expect that. It is the rebound effect of the extraordinary outcome achieved at the end of 2017, when everyone accelerated the race to investments, fearing that the super- and hyper-depreciation incentive measures would not be confirmed,” said Massimo Carboniero, president of UCIMU.