At the annual press conference in Frankfurt am Main, Franz-Xaver Bernhard, Chairman of the VDW, said: "We have largely overcome the effects of the coronavirus crisis. This is reflected in the production trend and in the order intake, which is also only just below the record result of 2018."

The industry is entering the current year with a significant order backlog. Even if the gap between orders and turnover is currently closing, the Federal Statistical Office reports an order backlog of twelve months for the machine tool industry. "This means that companies are well prepared for a potential slump in orders in the first half of 2023, as is currently becoming apparent," explains Bernhard. Capacity utilization is rising continuously and was back at 91.1% in January. Accordingly, 45% of machine tool manufacturers are cautiously optimistic about the current year, according to the results of the latest VDMA flash survey at the beginning of December.

In macroeconomic terms, the forecast is supported by the assumption that inflation has peaked. Energy and commodity prices have left their highs behind. The lifting of Covid restrictions in China, the largest market, will stimulate business. Other Asian countries such as India and the Asean region are also contributing to growth. Global investment is increasing for the third time in a row, albeit at a slower pace than in the past two years. As a result, international machine tool consumption is benefiting from this.

In Germany, too, investments are expected to return to growth after three years in the doldrums. Here, the automotive industry in particular had curbed its purchases because it was unable to produce due to the chip shortage. "The machine tool industry has taken advantage of the transformation process in the automotive industry and diversified its customer structure more strongly. According to our customer structure survey, their share fell from almost 43% in 2019 to around 31% in 2021," explains the VDW Chairman. In contrast, mechanical engineering and the manufacture of metal products have grown.
Double-digit growth in 2022

According to VDW estimates, machine tool production already grew by a tenth last year, three points more than expected in the fall. This corresponds to a real increase of 3% and a volume of around 14.1 billion euros. After a weak previous year, domestic sales grew by 16% in 2022, more than twice as much as exports at just 7%. Europe brought up the rear within the triad. Eastern Europe performed particularly weakly because trade with Russia has largely collapsed. Cumulatively, German deliveries have fallen by almost 80% since 2018. Italy was exceptionally strong, driven by a massive subsidy policy for the purchase of machinery in the past two years. Exports to Asia increased by 11%. Exports to Thailand, India, Japan and South Korea in particular grew strongly. China was the driver in the previous year. In 2022, the zero Covid policy made it more difficult to deliver machines. Some were replaced by local production. Finally, America was the driving force with a 24% increase, driven by Brazil, the USA and Mexico. As the second largest market, the USA is gaining in importance and, with an export share of 14.7%, is moving closer to China, which accounts for 18.7%.

The German machine tool industry is one of the five largest branches of mechanical engineering. It supplies production technology for metalworking to all branches of industry. Due to its key position in industrial production, its development is an important indicator of the economic dynamics of the entire industry. In 2022, the sector produced machines and services worth around EUR 14.1 billion with an average of around 64,100 employees (companies with more than 50 employees).