The hottest German machine tool consumption may ha

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German machine tool consumption may have slight growth potential in 2019

the 16th China International Machine Tool Exhibition (cimt2019), which lasts for six days, was grandly opened at the China International Exhibition Center (New Hall) in Beijing on April 15. As the most important world machine tool event held in China this year, cimt2019 attracted the attention of the global manufacturing industry

organized by imag exhibition company headquartered in Munich, at least 231 German companies showed their enterprise strength at CIMT 2019 from April 15 to 20. Some of them received strong support from the German Federal Ministry of economy and energy (BMWi) (there are 58 exhibitors in the German joint exhibition hall) and joined the official joint exhibition group, The other part is independent exhibitors (the German group has 173 exhibitors who can also be applied to protect PES from UV radiation). In addition, many German brands registered directly with Chinese organizers and participated through specialized dealers and local engineering companies. It is expected that the popularity of German brands will be further significantly improved. However, even if the number of brands has not increased, the number of representative companies in the above two exhibition groups is slightly higher than the number of German exhibitors on the official list provided by the organizer two years ago. The effective net exhibition area of the German Pavilion and the German exhibition group was 9265 square meters (an increase of 20%), making it the largest group of foreign exhibitors interviewed at the exhibition

Gerhard Hein, head of the Department of business statistics of VDW (German Machine Tool Manufacturers Association) in Frankfurt, Germany, pointed out that, "This shows the great commitment of German manufacturers to China as their most important export market. These companies not only regard their role as suppliers, but also as partners for the expansion and modernization of China's industrial sector, even when the business is not smooth. The project managers of the two German exhibition teams I mentioned are also on site today and can provide you with further details upon request."

China's industrial output and investment trends in 2018 and prospects for 2019

after an increase of 16% in the previous year, Germany's exports to China increased by 6% in 2018, reaching 2.3 billion euros. In 2018, China's industrial output value and China's investment in factory equipment for the most important machine tool user industry increased by about 6%, roughly equivalent to the growth in 2017, while China's machine tool consumption fell by 6% in Euro terms. In RMB terms, the decline is 4%. In contrast, imports in euros increased by 6%, equivalent to a 9% increase in the RMB. The difference between consumption and domestic production (decreased by 8% and 4% respectively) amounted to 5.4 billion euros. Therefore, China, a key market, remains the most important sales area for German manufacturers

in the continuous modernization process of China's industrial system, high-tech machine products are indispensable. For more complex machine tools, about a quarter of them were imported from Germany in 2018. When it comes to the wide range of technology combinations supplied by German manufacturers to China, the main categories of increasing demand are machining centers, grinding technology, lathes, and gear cutting machines for manufacturing transmissions

however, the trade between China and Germany is not a one-way channel. As in 2018, Germany's purchase volume in the past five years accounted for 4% to 5% of China's total machine tool exports, making Germany the fifth most important export destination of China. Spare parts, lathes, grinding technology, erosion systems and drilling machines are all popular products in the German market

looking at the purchase orders, we can clearly find that the transformation of China's industrial system has not been completed. In 2018, China's purchase orders for German machine tools fell by 18% year-on-year in euros. However, this phenomenon must be based on the premise that the demand for samples in the previous two years has increased significantly (by 25% and 11% respectively). After a careful study of the demand pattern in 2018, we can at least see that the demand has stabilized after experiencing weakness in the first half of the year (down 28%). After the National People's Congress and the presidential election, a large number of available funds have been significantly reduced, offsetting the high debt of enterprises in China

China's market share is still in the process of development

as of 2018, China is still the world's largest machine tool market, with a market value of 21.8 billion euros, but it should be understood that this market has not established a system, and there is no industry standard to rely on. Recently, the huge Chinese market is about 2.5 ahead of the United States (ranking second in the world), and far surpasses the German market, which ranks third. In 2018, as mentioned above, this huge consumption level in China decreased by 6% over the same period last year

although the Oxford Institute of economic research, a British economic research institution (VDW's forecasting partner), sometimes believes that the growth rate of this year has slowed significantly compared with 2018, especially compared with 2017, the Chinese market has never stopped expanding.. For all the important key statistics, from the perspective of the overall economic performance driven by services, the overall industrial production output is lower than last year's figure. The most significant contraction of capital investment, until the consumption of machine tools, is expected to slow down in 2019. Machine tool consumption, especially an important indicator of business quality in China, is expected to recover, especially the high-tech demand for key industries in China

the outlook of German machine tool industry in 2019 is optimistic

next, we will comment on Germany's own market situation. In 2019, despite the continuous political crisis in Germany, which may have a restraining impact on international trade and global economic growth, we predict that after the output growth of 7% in 2018 and 2017, there will be another 1% output growth in 2019. In 2018, the output reached 17.1 billion euros, a new high

in 2018, German exports increased by 4%. Exports to Italy, Switzerland, Spain, as well as the automobile markets of Eastern European countries and Scandinavia are the main drivers of double-digit growth. Although exports to Europe have been at a high level, the 3% growth is still a new high. In terms of Asian market capacity (an increase of 5%), the stable business volume to China (an increase of 6%) is reflected in the proportion of 22% of Germany's total exports. Germany's business in the United States is particularly satisfactory (with an increase of 5% and the total export volume accounting for more than 12%), ranking among the top 15 markets, while its business in France and Austria has declined (ranking fifth and sixth respectively in the market ranking), but the figure itself is still stable. For businesses with Mexico, the UK and Turkey, this downward trend is more obvious. In Asia, apart from China, German manufacturers have achieved only modest results in regions such as South Korea and Taiwan, China. However, the Vietnamese market is now benefiting from the relocation of the international electronics industry, and the purchase of factory equipment is also booming. Looking forward to 2019, the export trend is stagnant

in 2018, German imports increased by 11%. There is no doubt that the long delivery time of German manufacturers has played a role in boosting imports. Among the top 15 suppliers, the United States, Spain and Turkey showed a downward trend in imports. It has been proved that almost all other countries can expand delivery. Preliminary estimates for 2019 show that imports will decline slightly by 1%. According to tradition, the obvious supply relationship between German management companies and their overseas subsidiaries will play a very important role in imports

German machine tool consumption increased by 13% in 2018. There should be a slight growth potential of about 1% in 2019. In terms of order booking, there was only a 1% increase at the end of 2018, but this was based on the absolute highest level of almost 17.5 billion euros and a 5% increase in domestic demand

in 2019, domestic orders and export orders are expected to decrease, and the overall demand growth momentum is weak, with a decline of 3%

the data obtained so far shows that, on the whole, the basic optimism in 2019 is reasonable. However, the economic slowdown caused by the intensification of Global trade tensions or political differences has proved to be a serious source of interference in the previous stages

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