British Association for Manufacturing Technology predicts mild decline in UK machine tool demand

According to the UK Manufacturing Technology Association (MTA) forecasts, the UK's demand for machine tools will fall by 5% in 2008, 14% in 2009 and 10% in 2010 (all figures compared with 2007). This is a relatively mild recession by historical standards. In making its forecast, the MTA identified certain favorable factors, such as lower interest rates, a weak pound (many buyers of UK machine tools are exporters who will profit from a weaker pound), and good orders (which will Helps to maintain good sales levels in the short term). Of course, there are a number of headwinds as well, like the UK economy is in recession, and perhaps more importantly, the auto industry is in a sharp decline in some key machine tool exporters (although the latest CBI data on auto industry investment intentions is actually quite positive) ), and many smaller businesses are facing serious funding problems. The MTA's recently released forecasts describe the outlook for the global economy over the next few years. A recession is unavoidable, but it's unclear how long it will last and how deep its impact might be. In the UK, the economic downturn was caused by sluggish consumption, as higher oil and food prices, coupled with shrinking wealth due to falling house prices and stock values, led consumers to start saving more and slashing consumer spending. The MTA Quarterly Trends Survey results for the third quarter of 2008 also support the view that the downturn began this summer, when consumer confidence plummeted and orders contracted. Geoff Noon, statistician at the MTA, points out, “Our trend survey results reflect the impact of the problems that have arisen in the wider economy over the past few months on the machine tool industry. However, machine tool orders continued to grow until mid-2008. As a result, Our forecast for machine tool demand (which is based on machine deliveries rather than orders) should hold well into the new year. After the new year, machine tool demand in the UK will inevitably decline. However, various factors show that the manufacturing technology industry of this recession is only moderate. The only problem with this forecast is that past history suggests that in times of recession, risks will be further concentrated.”