Notable fall in the German production of machine tools in 2009

After a period of five years with a record of results, and with a turnover in 2008 of about 14,200 million euros, a throwback to 1999 levels are planned for 2009.

"In the past two years, our industry has experienced what we could describe as exceptional circumstances", says Carl Martin Welcker, President of VDW. Confidence in a continued market growth was international demand in advanced manufacturing technology to reach record levels. And many consumers that operate on a large scale in the international arena made reserves massively expanding its production capacity, anticipating a significant fragmentation of the international market.

This 'demand bubble' finally broke out due to the financial crisis of last year. And, as a direct result, the German machine tool industry experienced a dramatic decline in orders.

Machine tools industry, however, is still crucial in any segment of the market of industrial production. Due to its high-performance technology, it is still the 'strip of the chariot', allowing industry to introduce new products to the market, consumer goods or equipment.

"For Germany, as a productive country, therefore, it is really important to ensure the chain that links users, suppliers of equipment in the industry of machine tools and subcontractors or suppliers", stressed the President of VDW as today's main challenge in its industrial segment. Ultimately, the productivity and efficiency of the whole supply chain is the foundation upon which the competitiveness of the German economy, from the automotive to the machinery for the construction industry or the aerospace industryfrom electrical engineering to the sector of metal and metallurgy. "And - Welcker - continues in the coming weeks, months and years will be an important issue to ensure that medium-sized companies can count on sufficient liquidity, at an affordable price, so that they can finance not only orders, but also works of r & d".

This can be applied equally to the machine tool sector and their client SMEs. In the political arena, Wecker said that funds for loans, available through 'stimulus package', should be accessible as soon as possible. The appropriations process remains slow and is often more complex, given that the funds pass through various banks which have very different criteria for appropriations.

The long term demand of the world population to increase its development does not decrease. As a result, an increase in the request for a greater number of machine tool can be expected.

And the German industry in this segment is well positioned in the international arena. The President of the Association is convinced, moreover, that "after a demand back, this sector will benefit". Another important advantage is the fact that the company has already modernized their processes and can thus activate the supply quickly. Above all the companies that offer innovations to reduce costs will be part of this revival.

He is also expected that the emerging economies in Asia and South America, with their high demand in production technology, will be the first to 'jump on the train' growth. And there are still good opportunities in businesses less dependent on the economic, as the doctor, the energy or railroad trend. This is in sectors where investment continues despite the current crisis.

On the other hand, during the recent 'boom', the German machine tool industry was very cautious with regard to expand its work force. The latest figures are the highest point at 72,000 employees. And now, that temporary agency work has been eliminated and the fixed-term contracts have ceased, companies are betting on a formula for short-term contracts in order to maintain a base of workers. Like that, as a measure of the future, they are driving and intensifying its policies of development and staff training.