Orders for German plastics and rubber machinery have not yet ‘bottomed out’, the mechanical engineering industry association VDMA has announced.
Now that all existing orders have been proceed, the plastics and rubber association predicts a 10% to 15% drop in sales in 2024 in comparison with the previous year. Between January and August, sales were down 7%.
"This means that we have to revise our forecast downwards for the current year,” said Thorsten Kühmann, managing director of the VDMA Plastics and Rubber Machinery Association. “The expected lowest point in terms of incoming orders has not yet been reached. We have to be prepared for a 10 to 15 percent drop in sales this year," he added.
The German plastics and rubber machinery industry will thus see its third consecutive year with substantially declines in sales. In 2022, there was a 13% price-adjusted drop in sales in comparison with the previous year, and another 22% in 2023.
Last year, the association hoped global crises would stabilise in the course of 2024 and the industry would see renewed sales growth. Whilst such conditions have not materialised, central banks in the United States and Europe have recently started to cut interest rates, which might alleviate pressure on companies.
"However, due to the lag in production, it will take until the middle of next year for the positive impetus to be reflected in sales,” Kühmann predicted. “For 2025, we therefore anticipate a sales growth of between 0 and minus 5 percent,” he added.
Just in time for K, not in time for Fakuma
Kühmann predicts the industry’s downward turn will calm down ‘just in time for the K year’, taking place in Düsseldorf, Germany, between Oct. 8-15, 2025.
“Companies in the plastics and rubber machinery industry can look forward with confidence to a successful K 2025,” he said.
On the other hand, Fakuma 2024 will take place amidst tough conditions for machinery manufacturers. The show, taking place between Oct. 15-19 October, is sold out and has attracted some 1,636 exhibitors from every corner of the industry. Nonetheless, many exhibitors may be holding back big launches until next year’s K, as they wait for an uptick in investments.
Europe, US, China dragging results down
"We still have to wait a little longer for the turnaround," said Ulrich Reifenhäuser, Chairman of the Board of VDMA.
Between January and August, incoming orders declined 16% percent compared to the previous year. The VDMA says weak demand is affecting all markets, but Europe has been particularly affected. The US and Chinese markets are also ‘weakling considerably’, but there are ‘individual glimmers of hope at a lower level in Mexico and India’, the association noted.
These data support recent reports from the Italian plastics and rubber industry association Amaplast, which has experienced a downturn in imports and exports of machinery, equipment, and moulds in the first half of 2024.
Exports to Germany – historically the main trade partner of Italian manufacturers – have been ‘lacklustre’, whilst those to the United States have ‘slowed somewhat’ after remaining high in recent years. Whilst exports to European Union countries from Italy are slowing down, exports to non-EU countries are growing by the double digits.
The European industry has been facing an energy crisis since supply of cheap Russian gas slumped after the invasion of Ukraine in February 2022. The transition to electrification has since accelerated but high electricity prices in some EU countries – particularly Germany – remain a major competitive disadvantage.