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Outlook for production and sales in the German machinery industry

Probable prospect for production and sales of German machinery industry is sideways moving

Up to December 2014 data for production and sales of the German machinery industry are represented from the Federal Statistical Office. We put these data into the context since the outbreak of the world economic crisis 2008/2009. That makes it easier to answer the question, in which situation the machinery industry is and which development for the future will be probable.

Production of machinery industry caught in sideways range for four years

Update February 9th, 2015 - The course of production of the German machinery industry in 2014 is completely available. We will integrate the year 2014 into the context since the beginning of the world economy crisis 2008/2009:


The following diagram leads directly to these statements:

  • Production of the German machinery industry has not exceeded yet its pre-crisis level five years after the crisis low (71.5 index points in January 2010).

  • Since the crisis low five times production made new highs that did not exceed the pre-crisis level, in fact, they were followed by drops in production.
Production German machinery industry from 2008 to 2014 December.


  • Since 2011, i.e. for four years, production has been swinging up and down without establishing an up or downtrend. Production is running sideways within the limits from 88 to 133 index points.

  • Production has been swinging around an average level of 113.7 index points since 2011. This  clearly lies below the pre-crisis level of 134.2 index points. So there is no sector growth of machine production.

  • In December 2014 production reached a two year high with 131.1 index points. So the smaller range of fluctuations in the course of 2014 led to a strong breakout in production as expected.

Sales in sideways range since 2012, making a very top in December

Sales have been showing the same type of the development as production. However, two differences are showing up.

 

The sideways movement started 2012 and not as with production in 2011.


And sales exceeded their pre-crisis level of 2008 (137.0) five times from 2010 to 2014. The crucial point according to our opinion is however that the pre-crisis level was not exceeded in a stable manner.

Sales of German machinery industry from 2008 to 2014 December.

Also in regard to sales the smaller range of fluctuations in 2014 led to the jump in sales to the very top of the sideways range.


Is an end of the sideways moving probable?

Sideways moving is the probable prospect

The worldwide industrial production is showing a close relation of growth, stagnation and setbacks to each other appearing in all of the three country regions being important for the world economy, i.e. the industrialized countries, the BRIC and MIST countries.

 

This mixed situation of growth, stagnation and setbacks in the world economy reflects itself in the development of the export-oriented machinery industry in 2014 hindering so far both a deeper sagging as well as a continuous growth of production and sales compared to the previous year. Hence quite larger fluctuations may arise.  


A typical development of the world economy for the stage of crisis overcoming would be a unified growth of the worldwide industrial production. However, the close entwinement of growth, stagnation and setbacks indicates a non-typical development, affected by the three resp. four structural changes, which were already analyzed in the Quest Trend Magazine.  


They are also leaving their mark on the stage of the crisis overcoming in the German machinery industry. It is probable that the German machinery industry will furthermore be caught in the sideways range.

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