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European machine-tool makers bounce back

22 May, 2010

Cecimo, the body that represents Europe’s machine-tool makers, is reporting that orders turned around in the fourth quarter of 2009, after plunging by more than 50% in the first quarter. But Michael Hauser, the organisation’s president warns that because order backlogs are still very low, “it will take a few more weeks before the turnaround is clearly observed in sales”.

The recovery in the European machine-tool industry is being driven by an increased demand from emerging markets – notably China. Despite the severe crisis in the sector in 2009, the European share of the global machine-tool market rose from 55% to 61% in 2009. According to Cecimo, this proves how competitive European suppliers are, and it expects this trend to continue in 2010.

However, it warns that it will take longer for European consumption to recover, because capital investment in end-user industries is still low, capacity utilisation is below average, and credit is still difficult to obtain, especially for small companies.

Cecimo is worried that its members are facing obstacles when exporting to some countries – such as recently introduced machine import regulations in South Korea. These obstacles also take the form of additional costly local certification, or delays in getting import or export licences.

“The economic crisis has unfortunately led to a revival of some national reflexes demonstrated by a surge in small-scale national initiatives which are often more of a hindrance than a help to boosting the economy,” says Frank Brinken, chairman of Cecimo’s economic committee.

Cecimo brings together 15 national associations for machine-tool builders, representing about 1,600 industrial enterprises in Europe, more than 80% of which are SMEs. These companies employ 150,000 people and had a combined turnover of €17bn in 2009. More than half of their output is exported outside Europe. Cecimo’s members account for more than 97% of Europe’s machine-tool production, and more than 40% of global production.

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