Production and sales in German machinery industry 2008 - Dec. 15
Trend to value-added machines and sideways moving of production and sales – outlook for 2016
The situation of the German machinery industry and its probable development for the future opens up the view on the last eight years since the outbreak the world economic crisis of 2008/2009.
Update February 10th, 2016; first published August 27th, 2012 - Considering production and sales of machinery industry over in the last eight years, structures show up that disappear in short term view from year to year or from quarter to quarter.
The long-term analysis discovers five substantial features:
Production moving sideways since 2011. After the crash as sequence of the world economic crisis, production climbed out of the crisis low until 2011. Since then it has been swinging up and down around an average line at currently 113.4 index points. In other words, production has been moving sideways since then without growth or downward trend.
This trendless up and down started 2011 and already persists for five years to the end of 2015.
Production does not exceed its pre-crisis level. In this time production exceeded its pre-crisis level (134.2) with 135.6 index points only once in December 2014. Then it dropped back again.
Sales indicate in contrast a partly different picture.
Sales moving sideways since 2012 with ascending tendency. Sales have been moving like production within a large sideways range starting in 2012. In contrast to production sales has been indicating an ascending tendency since 2013, visibly at the rising moving yearly average line (dashed line).
Sales stable above pre-crisis level. Sales exceeded their pre-crisis level several times in a different way from production. In December sales marked with 155.9 index points even their peak since the outbreak of the world economic crisis.
Trend to value-added machines. Stagnating production, slightly higher sales – so machines becoming more value-added since 2012.
What is the outlook for 2016?
Is an end of the sideways moving probable? Regarding this question our assessment from this June remains unchanged.
Sideways moving is the probable outlook for 2015 due to structural changes in export markets
The analysis of the worldwide crisis overcoming from 2008 to 2014 shows that the usual general upward business trend after a crisis failed. In its place the worldwide industrial production is showing a coexistence, a close relation of growth, stagnation and setbacks to each other. We have characterized this new phenomenon as a structural change in the process of crisis overcoming.
This structural change is coining the course of the industrial production in the industrialized countries and the BRIC countries. Industrial production in the MIST countries is in a general upward business trend.
The structural change with its close relation of growth, stagnation and setbacks to each other in the world economy is also limiting the opportunities on the world market for the German machinery industry keeping it caught in a sideways range.
Comparing export shares of the German machinery industry with the course of industrial production in those export countries that absorb 80% of the machine exports from Germany, it becomes apparent that the export shares are lagging behind industrial production in the export countries apart from the USA.
The Quest Trend Magazine has raised the question about a changing demand structure for machines as a possible reason. But the fact alone that export shares do not climb together with increasing industrial production has an limiting impact on the development of production and sales of the German machinery industry.