German machine tool industry grows and steals Asian market from European competitors

The German Machine Tool Builders’ Association predicts 5% out-put growth in 2012 with China as a captive audience.

In 2011 the German Machine Tool Builders’ Association (VDW) recorded a Eu13.1 billion turnover for its sector. “At 33 per cent, this is the highest growth ever recorded”, said Martin Kapp, chairman speaking at the association’s annual press conference in Frankfurt am Main last week.

German exports were also up 33% and were valued at Eu8.1bn.

China receives the majority of Germany’s exports. In 2011 the market was worth a standalone Eu2bn. It is worth more than three times Germany’s next largest export market, North America.

Mr Kapp was pleased with the work German machine tool’ manufacturers have done to position their equipment and services competitively in the most important global markets.

“Given the same starting position in 2000, none of the other Europeans achieves a proportion of exports to Asia of more than 30 per cent”, explained Martin Kapp. This also applies for deliveries to the BRIC nations.

However, Germany is not neglecting its traditional markets and 2011 saw surprise growth in North American investment. As a whole, orders rose by 45% in 2011.

In Germany itself, plant investment rose (by 38%) with the automotive market in particular looking to upgrade manufacturing technologies.

In order to meet demand, VDW shows that German machine tool manufacturers ran at 93.8% capacity in 2011. A 9.5% order backlog, which shows little sign of shrinking, will ensure that high levels of productivity push forward into 2012.

In contrast to Germany’s burgeoning exports and domestic investment, the country’s imports were up 43% with key suppliers being identified as Switzerland, Japan.

Germany’s machine tool industry now employs 67,800 people.