European machine tool industry turns the corner

Machine Tool Orders turned around in the fourth quarter of 2009 in CECIMO countries, after dropping by over 50% in the first quarter of 2009 (in comparison with the same period one year before) as a consequence of the financial crisis. But CECIMO comments that since order backlogs are still very low, it will take a few more weeks before the turnaround is clearly observed in sales.

Recovery in the European machine tool industry is driven by an increased consumption in the emerging markets, and notably from 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%. This proves the competitiveness of the European sector in global markets. CECIMO expects this trend to continue in 2010.

It will take more time for European consumption to recover, since capital investment in the traditional end-user industries is still low, capacity utilisation is below average and credit is still difficult to get, especially for the smallest companies. The current financial instability associated with the sovereign debts of some European countries may also hinder the necessary cash flow that is required by industry to invest in modern and energy efficient production equipment. The geographical shift of the machine tool consumption towards the emerging markets of Asia and Latin America makes it imperative for the European machine tool industry to obtain fair and non-discriminatory access to those markets.