German machine tools have twists and turns, and the industry power comes from the Asian market

The machinery manufacturing industry, regarded as Germany's 'facade' industry, is currently facing what experts describe as a 'twisted and twisted' predicament. Four months ago, the machinery manufacturing industry seemed to be in a bullish situation, not long ago forecasting a growth rate of 4% in 2012, and now reporting a downward forecast of zero growth. The German Machine Tool Builders' Association (VDW) had previously predicted that the machinery industry would be 'thriving'. The twists and turns of the German machine tool industry The global economic recession has taken a toll on the machinery manufacturing industry. In 2011, an initial forecast of 14% growth was later revised down to 12%, resulting in a negative 1.9% growth in December. In 2011, German machinery manufacturing rose by 24 billion euros to around 187 billion euros, thanks to a 12 percent increase in domestic sales (almost as much as exports). Capacity utilization averaged 88.1% in 2011 (78% in 2010). From January to November, machinery exports increased by 14.5%. All 20 major markets for German machinery products saw growth, with China up 26%, the United States up 22.2%, Russia 33.2%, Turkey 29.3%, Brazil 23.6% and India 15.3%. Eurozone exports rose 9%, below average. Among EU member states, France is in the leading position with a market share of 16.5%. However, there was a 4% decline overall. Domestic orders rose 2% from the beginning of the year, while export orders fell 7%. Wilfried Schaefer, executive director of the German Machine Tool Manufacturers Association, said: 'December was the first negative growth in 25 months, which led to a decline in the fourth quarter.' However, in December 2011, it achieved the highest level since the implementation of order statistics in the early 1960s. new highs. In 2011, the output of machine tools increased by 1/3, setting a new high growth rate. During the year, the average capacity utilization rate reached 93.8%. Backlogs remained at 9.3 months. Among the 28 industries counted by the association, 23 industries saw an increase in output value last year, including the machine tool industry. Followed by robotics, automation and agricultural technology. Due to the high level of production in the German machine tool industry, the association predicts a slowdown in growth this year. However, the association remains 'optimistic' about the year. In the case of order reserves, backlogs, and capacity utilization at a high level, the German Machine Tool Manufacturers Association expects the German machine tool industry to grow by 5% year-on-year in 2012. This forecast is based on early macroeconomic indicators. The association's forecast partner Oxford Institute forecasts that the global economy will maintain a growth rate of 2.5% in 2012. On the basis of the expected strong growth in industrial output, capital investment in machine tools by major customer industries is also expected to increase. The main driver of this growth remains Asia, with leaders including Thailand, China, Taiwan, Japan and India. The German IFO business climate index shows that the confidence index of the machine tool industry itself and its main customer base has risen. 'Rescue' also looks at the Asian market The key to meeting the challenge of the global economic recession is to strengthen globalization and enter the Asian market. The challenge for the industry, however, is that high costs and a shortage of skilled workers must be properly addressed. Some German companies are also considering outsourcing production to low-cost production areas. However, many companies still stick to German domestic production, which they believe is more secure. For example, 70% of machine tools exported from Germany last year were produced at German production sites. Last year, the output value of German machine tools reached 13.1 billion euros. During the same period, overseas output value reached 11 billion euros. Overseas production is mainly in Switzerland, the United States and other European countries. Martin Kapp, president of the German Machine Tool Manufacturers Association, said: 'Germany's production scale in China is still lagging behind.' Although the production scale in China is relatively small, the German machine tool industry has indeed seized business opportunities in China and other Asian countries. 42% of Germany's machine tools are exported to Asia, up from 11% a few years ago. However, many doubt that Asia's largest market, China, can survive the global recession alone. Compared with other European competitors, the German machine tool industry is in an advantageous position in Asia. However, Kapp said that the biggest challenge for German manufacturers in the future is the need to strengthen business internationalization and innovative technology upgrades. Even when German machine tool suppliers are in turmoil in traditional markets, the industry lists Asia as a 'huge potential market'. According to a recent survey by the Stuttgart Chamber of Commerce, machinery manufacturers are expected to be higher than all other industries, and optimism in the industry outweighs pessimism. Martin Wansleben, executive director of the German Chamber of Commerce and Industry in Stuttgart, said: Part of the optimism in the sector stems from a lower reliance on the European market. 'The industry is driven by the Asian market,' he said.