Growth expected in European machine tool production

Mid-adult male manager and a female engineer programming a CNC machine at the manufacturing plant.

CECIMO’s Economic Committee says that the value of European machine tool production has increased to 22.8 billion euro in 2014 and that European machine tool consumption is expected to continue to grow in 2015.

Challenges for industrial policy

Digitalisation of manufacturing and the penetration of disruptive technologies into the industrial base lead to significant productivity and efficiency gains. Breakthrough production techniques, such as additive manufacturing, stretch the limits of product design and innovation whilst providing solutions to societal challenges. Moreover, the mass-customisation trend opens the way to the reindustrialisation of Europe. CECIMO urges the EU policymakers to shape supportive framework conditions for industry digitalisation and development of additive manufacturing technologies to increase the competitiveness of the European industry as a whole.

The European machine tool industry is actively contributing to the harmonised standardisation processes on machine tool safety (via CEN TC 143) and pleased to see that also the topic of addictive manufacturing will be finally on the European standardisation agenda within the CEN structures. CECIMO pressures that European standardisation should reflect the state-of-the art technological developments. It should also completely take into account industrial competitiveness by consulting with industry throughout the standardisation process.

The European Commission and the US government have expressed their strong commitment to intensify the trade talks and aim for an ambitious and comprehensive agreement. CECIMO appreciates the positon of the European Commission to target technical requirements, standards and conformity assessment in the chapter specific to engineering of the TTIP. “The European machine tool industry is dominated by SMEs who lack resources to cope with excessive red tape in regulatory or custom procedures. The TTIP will be beneficiary for innovative SMEs who will be able to tap into market opportunities in the US, especially in the view of the ongoing re-shoring trend,” highlights Filip Geerts, Director General of CECIMO. CECIMO continues to stress the importance of addressing non-tariff barriers, technical requirements and regulatory cooperation in the final agreement.

Economic situation and outlook

The European economy showed a positive economic growth in 2014, after two years of contraction and flat trend. The European machine tool production increased from 22.7 billion euro in 2013 to 22.9 billion euro in 2014 and it may increase to another 3%.

The CECIMO countries exported machine tools in 2014 for a value of 18.2 billion euro, which is marginally less than in 2013, because of the slowdown of economic growth in the emerging markets. On the other hand, the changes of consumption pattern in those countries and the improving growth outlook in developed markets forecast a growth in the exports this year.

The European machine tool consumption grew 7% to 13.5 billion euro in 2014. Considering the positive trend in industrial capacity utilisation, European manufacturers will look for possibilities to expand their production lines. Hence, the machine tool demand is forecasted to grow in 2015.

The machine tool imports to CECIMO countries increased to 8.9 billion euro in 2014. The weak euro, making imported goods relatively more expensive, will also influence those flows this year.

Dr Frank Brinken, Chairman of CECIMO Economic Committee and a member of the Board of Directors, Starrag Holding Group explains: “On one hand, we see growth slowing down in emerging markets, the risks relating to possible Greek exit from the euro zone and the effects of EU sanctions on CECIMO export sales to Russia. On the other hand, we see a solid demand in advanced countries. The weak euro will certainly have a positive effect on machine tools exports. Therefore, our expectations for 2015 are still on the positive side.”