VDW Predicts Machine Tool Industry Growth
The VDW (German Machine Tool Builders’ Association) is predicting growth in the machine tool builders’ industry, and recommends investing in engine and alternative fuel research.
The VDW (German Machine Tool Builders' Association) expects production in the German machine tool industry to grow by 6% in 2021 to around €12.6 billion. At the association's annual press conference, chairman Heinz-Jürgen Prokop stated that the improved mood in the economy is raising the willingness to invest.
"After two years of great restraint, there is now a strong need to make up ground," Prokop says. “However, the prerequisites for companies regaining their confidence and investing are beating the corona pandemic and sketching out a sensible roadmap for gradually emerging from lockdown."
The VDW finds China is now the principal driving force behind the global economy, with the U.S. also providing a boost following President Biden's election victory.
According to the association’s reports, the automotive industry — the largest customer for machine tools — has particularly benefited from the economic upswing in China. It also notes that electronics, food processing, logistics and parts of the medical technology sector continued to do good business during the crisis, and that these industries are set to continue excelling.
In Europe, too, investments are expected to rise again by 10% after a major slump during the last two years. The association notes that this period was very difficult for many reasons, but the machine tool industry is now predicted to undergo significant growth. Oxford Economics, the VDW's forecasting partner, predicts a 35% increase for orders in 2021, noting there were already indications of this trend in November and December. The global Purchasing Managers' Index and the German Ifo Business Climate for the capital goods industry are also on course for growth.
Prokop also took notice of the Euro 7 plan to limit emissions for cars and truck to zero by 2025, calling for an expansion in research into environmentally friendly combustion engines and fuels.