Global Machine Tool Consumption Growth Remains Strong In 2019

- Mar 26, 2019-

According to the fall forecast of the Oxford Economic Research Institute, the UK's economic research institute, the global economy is expected to grow by 2.7% in 2019, investment will increase by 3.1%, and industrial production will increase by 2.9%. Machine tool consumption will increase significantly, with a growth rate of 3.6%. In 2019, the EMO Hannover will be grandly opened on September 16-21 in this economic context.

Dr. Schaefer, General Manager of the German Machine Tool Manufacturers Association, Hannover Metalworking World, said at the Hannover Metalworking World Press Conference held in China in March 2019, “The global economy has not achieved the dynamic growth of the previous year. After years of dynamic growth, slowing growth has created opportunities for global companies to focus on strategic issues again and make decisions for future investments.” Hanover Metalworking World is an ideal platform in 2019. The upcoming Global Metalworking Exhibition will be based on the theme of “Intelligent Technology Drives Future Production!”, sharing information on modern production technology, network and digital future production solutions, and new services combined with traditional processing technologies.

Although economic data is expected to be lower than the results of 2017/2018, it still shows strong growth. This is due to the rapid development of Asia (GDP growth of 4.5%), followed by the Americas (2.4% GDP growth) and Europe (GDP growth 1.6%). However, in terms of capital expenditures and machine tool consumption, Europe has taken the lead, growing by 3.8% and 4.7% respectively. Especially in Eastern Europe, consumption is expected to increase significantly. Hungary, Poland, the Czech Republic and Slovakia remain successful industrial zones that are well developed and attract investment. Europe's largest market, the birthplace of Hannover's metal processing world - Germany's economy is booming but growth is slightly slow. It is expected that in 2019, German machine tool consumption will once again achieve strong growth, up 3%.

Machine tool consumption growth rates in Asia and the Americas are 3.3% and 3%, respectively, so Asia will be the second largest international customer next year. Among them, small Asian countries such as Vietnam and Indonesia have higher growth rates, and machine consumption in the Indian subcontinent is far above average. But in terms of China's largest market, China, machine consumption has maintained a modest level of growth across Asia and will continue to exert strong influence over the next few years. In addition, despite the slowdown in the government's tax cuts and attractive depreciation policy conditions, US demand for machine tools in 2019 remains high.

In the world's nine largest customer industries, the investment in the precision machinery and optics industry, the automotive industry, the electrical engineering/electronics industry including power generation, the aircraft industry and other transportation industries (especially rail transport and shipbuilding) are above average.

Dr. Schaefer said, “Now look at the state of the machine tool industry in Germany, the host country of Hannover Metalworking.” Both production and exports in 2018 set new records. According to estimates, the industry has produced machinery and services worth more than 17 billion euros, with an export rate of about 68%.

Still, the long-term rise will end here. Orders in 2018 increased slightly by 1%, and there were signs of a significant slowdown in the fourth quarter. On the one hand, the global economic development momentum has diminished, and markets outside the euro zone have fallen into deficits. On the other hand, the holding of Hannover's metal processing world in the second half of 2017 boosted domestic demand. The particularly strong demand in these months puts very high demands on the 2018 total order target. It has been proved by practice that until the end of 2018, the number of orders has not exceeded, but negative growth has been achieved, in line with expectations. Finally, with the expansion of trade conflicts, global protectionism has risen, oil prices have risen, various emerging markets have fallen into a high inflation predicament, and the scale of uncontrolled expansion of debt has been frequent. The current global situation is disturbing, especially for small and medium-sized enterprises.

Despite this, the number of employees exceeds the historical record, growing to 75,000; by the end of 2018, almost all employees can make full use of their talents, with a utilization rate of 93.7%. Dr. Schaefer said, “The machine capacity utilization and supplier parts supply show that the economic slowdown has reduced the pressure on the company and employees, and created a space for thinking, which is easy to set the necessary route in the future. Challenges, such as automation and industry 4.0 that have changed manufacturing processes and jobs, the company recommends smart investment plans, such as the Hanover Metalworking World in 2019."