VDA Forecast 2024 Stagnation For Global Machinery Turnover
The investment environment is improving only gradually, as inflation is proving more persistent than the central banks had hoped. The pace of interest rate cuts is therefore slower than in previous cycles. This delay means that the dampening effects of high interest rates will last longer and, as a result, there will be a time lag before machinery and equipment customers are in the mood to invest. Differences are already emerging in early summer 2024 with regard to the start of an admittedly still rather fragile recovery. Outside of Europe, sentiment has already reached a level that signals an imminent economic recovery. In contrast, the economic leading indicators in the EU are still in contractionary territory. Hopes are therefore pinned on the year 2025.
In the second half of 2024, the declines in production and turnover in most machinery and equipment manufacturing countries are likely to slow down. This is rarely due to growth over time, but rather to base effects. The comparative figures for the same period of the previous year are simply no longer as high as they were in the first half of 2023. Calculated for 2024 in total, global machinery turnover will stagnate for the second year in a row on a price-adjusted basis, although there is considerable heterogeneity between countries.
Automotive Industry
Last year, the German machine tool industry supplied around 27 percent of its production to the automotive industry and its suppliers, according to the latest customer structure survey conducted by the VDW (German Machine Tool Builders’ Association) among its members. That represents a decline of around 16 percentage points in just four years. “The automotive industry remains one of the most important customer sectors for the German machine tool industry,” says Franz-Xaver Bernhard, Chairman of the VDW. “The result does, however, reflect two developments. Firstly, the transformation to electric drives means the automotive sector is investing significantly less in machining. At the same time, however, machine tool manufacturers are also diversifying their customer portfolio.” In fact, the share accounted for by OEMs has more than halved to 10 percent since 2019, while that of suppliers has only fallen from 19.9 to 17.2 percent.
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