Column number 80 – 2021

The gradual implementation of the vaccination campaign throughout Europe and the United States is in some way fostering optimism for the future in the industrial sector as well. The companies involved in this sector, in any case, had never stopped, except in the first months of the pandemic, and this meant that the industrial sector was the driving force for the great recovery of the third and fourth quarter of 2020. A recovery that, of course, was not enough to compensate for the drop in turnover, production and orders: according to the statistics of Cecimo, the European Association of Machine Tool Manufacturers, production in 2020 fell by 26%, returning roughly at the values ​​of 2009-2010, the lowest point of the financial crisis of the last decade. If we add to this figure that a decline in the production of machine tools had already been recorded during 2019, it can be extrapolated, with a motivated conviction not to deviate excessively from reality, that, beyond the pandemic crisis, the contraction of production, already underway, is partly due to the conclusion of the expansionary phase of an economic cycle. It is, in fact, very likely that the effects of the pandemic and the blocking of many activities were felt to a more marginal extent on the industrial sector than on other sectors of the economy, more aimed at the consumer.

Of particular note is the jump in demand from Italy in the fourth quarter, with a sensational + 347% in orders compared to the same period of 2019. A sudden growth, followed by a rapid decline in the third quarter, which did not prevent a -28% in the year.

What will be in the coming months depends in part on the progress of the health emergency, but only in part: if it is true, as it is true, that the industrial sector is less involved in containment measures and therefore is less affected by trend, the growth in the coming months will certainly be such as to allow a return to the levels of the end of 2018 in orders and production, but it could also represent the beginning of a new economic cycle, perhaps shorter than the previous one, which lasted just over ten years. If this is the case, after a surge between 2021 and 2022, we can expect a period of substantial stability or even a slight contraction until 2023.

It is also true, however, that the effectiveness of statistical models in the presence of a situation such as the current one, whose last precedent is a century ago, is not so clear: the recovery in consumption, on the one hand, and the slowness immunizations in fast-growing countries may represent discriminating factors which, at this time, we are unable to assess correctly.

For now, we welcome with enthusiasm the probable reopening of the fairs in attendance, starting with Made in Steel and Emo, in the autumn. It will be a bit like waking up from a long sleep and you will forgive us if, meeting us in the stands, we look at each other as the survivors do.

Column number 79 – 2021

According to Cecimo’s quarterly review of machine tools market and production, MT production levels are down, as early estimates show output decreasing by more than 30% in 2020 due to the pandemic. In absolute volumes, machine tool production is expected to drop to 18,7 billion euros in 2020. This is the worst score for CECIMO aggregated machine tool output since the 2009 financial crisis.

Always according to Cecimo statistical toolbox Q3-2020, EU27’s Industrial Production Index continue to decrease in the third quarter of 2020. The European economy’s average IPI quarterly reading is currently 99,3, a -5% decrease compared to the same period of the previous year. In sectoral terms, the investment goods sector reports double-digit decreases during this three-month period.

The question is now: how long European industry and, from a larger point of view, European economy will stand this state of things? These figures are some months old, when we all were waiting for 2021 as the year in which pandemic would have definitely left behind: now, in ides of March, we have the reasonable sureness that we will have to handle with it until the third quarter and that its significant legacy is yet to come.

In Italy, where total exports mark -24.2% compared to 2019, for a value of approximately 2,300 million euros, the scenery is dark: government largely permitted extraordinary layoffs, with a contemporary ban on firing, but at the end of these measures many companies will be forced to fire many of their workers. If the pandemic will last any longer, it will be difficult for a great number of companies, not only in Tourism and Food and Wine, but also in Services and Industry, to hold on: many have already closed, much more will in short.

On 11 February 2021, the European Commission published its Winter 2021 Economic Forecast. The forecast projects that the euro area economy will grow by 3.8% in both 2021 and 2022. The forecast projects that the EU economy will grow by 3.7% in 2021 and 3.9% in 2022.

The euro area and EU economies are expected to reach their pre-crisis levels of output earlier than anticipated in the Autumn 2020 Economic Forecast, largely because of the stronger than expected growth momentum projected in the second half of 2021 and in 2022.

After strong growth in the third quarter of 2020, economic activity contracted again in the fourth quarter as a second wave of the pandemic triggered renewed containment measures. With those measures still in place, the EU and euro area economies are expected to contract in the first quarter of 2021. Economic growth is set to resume in the spring and gather momentum in the summer as vaccination programmes progress and containment measures gradually ease.

An improved outlook for the global economy is also set to support the recovery. The economic impact of the pandemic remains uneven across Member States and the speed of the recovery is also projected to vary significantly.

Also for Tube Today the pandemic made everything more complicated: the exhibitions have changed their schedule, some have been cancelled, some other held virtually, and the organization of the issues has been subject to constant changes. Anyway, we are still working to give to our readers, subscribers and customers, the best service we can.

See you in better days.

Column number 78 – 2020

The hope we all had is that at this point we could see the end of the emergency and that we could start talking again about a possible recovery and the steps necessary to make it stable. Instead, we are still talking about lock-downs, more or less rigid, and of a situation that throughout Europe alternates short periods of regression with long, dark weeks of growing pandemic, with frightening numbers linked above all to victims, collapsing health workers, exhausted doctors, nurses and health workers.

We met with conviction at Tube Düsseldorf, convinced that the move to December was a reasonable guarantee that the fair would take place regularly. Instead, here we are, orphans of the main event in the sector, to give us an appointment for a 2022 that seems very distant and almost unreal, instead it is just around the corner.

There are only a few months left, then we will talk again about buying spaces, programs, event calendars, square meters of exhibition space, appointments. Above all, we will talk about who will be there and who will not, meaning not only who will be present at the fair, but who will be saved from this dramatic pandemic that has claimed so many victims among the population but which as many threatens to reap them in the various sectors of the economy.

Up to now, state incentives, provided in each country in different forms, together with the prohibition on redundancies, also in this case operating in different forms in many EU states, have anesthetized a situation that risks becoming explosive with the start of the year. In many sectors, in addition to the crisis in demand in Europe, the effect of competition from other countries where the pandemic has had infinitely less serious effects is also felt, just think of China where, in addition to the initial outbreak, there have been no waves return if not minimal, while in Europe the second wave is likely to be even worse than the first.

In many areas, innovative solutions are also being tested. In compliance with Keynes’s motto of “work less, work everyone”, some global giants of the caliber of Microsoft and Unilever are also experimenting with the short week, even showing satisfaction with the productivity of employees which seems to have increased. Some national governments, not least New Zealand, whose young prime minister has aired, en-passant, the possibility of introducing holidays to get to the short week of state, are taking an interest in this possibility to pursue the goal of replenishing the lost posts. with anti-Covid measures. In short, where the Industry 4.0 revolution does not arrive, the pandemic could arrive: we do not know if we should be happy about it …

Column number 77 – 2020

The Covid-19 pandemic is still spreading across Europe and the whole world, putting significant pressure on national budgets and all the manufacture sector. It is useless, but we must take note  that industry is in deep suffering and not all companies will come out from the crisis, not all will be still standing when everything will come to the end. Orders are falling, in second quarter industrial production index in Europe decreased by almost -20% in Q2 2020 against the same period of the previous year. In April alone, industrial output fell by -27% on a yearly basis. The second wave of pandemic will finish the job, giving the coupe de grace to many companies which were already not so solid before: the positive aspect is the third quarter, with a resumption of industrial production that, even if the data are still not completely available, might give a pulse to the sector with positive trend. In the fourth quarter, which was aimed to see a general growth of orders and activity, the spread of pandemic upset all the forecast, now substituted by a giant question mark: what will be in the future?

The only solution is holding on, trying not to fall and saving employees, waiting for better days, in which planning will be easier and uncertainty will not be the leading feeling for everyone.

It is difficult for managers and industrial to face a time when they can not control their own destiny, when the future is in someone else’s hands: in industry, with numbers and accurate esteems you can usually foresee everything, in every condition you can always try to do something to reverse the worst situation. Now is not possible: we can only wait and see what happens. It’s not easy to accept for women and men of action.

Another topic in which we can only wait and see what happens is Tube Dusseldorf. After the spring postponement, the exhibition is scheduled from December 7th su 11th: while other exhibition, EuroBlech first, chose to go virtual, Tube is still to be held in presence. Many companies, as you can read in our special pages inside this issue of the magazine, decided to cancel their participation, but many are still ready to take part to an event that is hoped to be the first step to restart of the sector. We will be there, with daily reports on our website and many photographies directly from Messe Dusseldorf, if nothing comes to change the plans. Effectively, if the exhibition will be really held, it would be a great injection of positivity and hope for the whole sector, as well as an impulse for business.

Inside our magazine, you will find many pages dedicated to Tube2020, as much as to other exhibition that have taken place in these months: Bi.Mu in Milan, EuroBlech Digital and Tube&Wire China.

Enjoy your reading.


Column number 76 – 2020

The uncertainty of political stability derives from a mechanism for economic stability: what an irony

There is a Europe that tests its political stability with a discussion on the Recovery Fund and European Stability Mechanism, intended to protect economic stability,. Destiny puts a great dose of irony, as always, and politics, also in this case as always, a good dose of myopia. The future of Europe is played by Conte and Rutte: the first, holding a pair of eight, the second with a color, specifically money, those who absolutely do not want to hear about sharing with the Mediterranean countries, France included, on her knees for a health emergency faced from the chest and not with her hand over her eyes.

In the end, Conte’s victory with a pair of eight only accentuates the image of a Europe hopelessly divided into three large groups, the North, the South and the East, with Germany’s Merkel pensioner engaged in the vain, but admirable, attempt to keep up a shack that makes water from all sides: sooner or later, even the Teutonic boy will finish his fingers to insert into the holes that open in the blue-starry dam right from Holland. At that point then the flood will drown the dreams and hopes of three true statesmen, De Gasperi, Schumann, Adenauer, left in the hands of personalities of quite another caliber and thickness, not adequate to overcome partisan interests to achieve a higher purpose and wider.

Pessimistic outlook? Maybe. But a Europe incapable of jointly managing political, military and social crises, now finds itself having to admit that it is unable to jointly manage a health emergency, even failing miserably in finding a purely economic agreement to support not only the member states in difficulty, but also that glimmer of unity that has remained.

It is not a question of populism: it is a question of appearing not up to par with the Europeans. Faced with an economy based on the ability to work together, in part, and to share markets and that needs, in almost every country of the Union, the same attention: defense of production, high guard on the costs of materials first, and many other actions excellently summarized by Cecimo in its decalogue for the post Covid-19.

It is difficult, in such a context, to be able to think of optimism and a positive future, also due to the objective difficulty that the health emergency has caused to many companies in many European countries.

Among the main novelties of this issue, the postponement of Euroblech until next March. Euroblech was the fair that had most resisted the postponement, but faced with the changing scenarios of the epidemic in countries traditionally very important for the world of sheet metal and machinery, from South America to the Far East, the organizers preferred to give the appointment to 2021.

Resite instead BIMU which is betting strongly on the possibility of a return to normal in the autumn, as well as Tube, also scheduled for December.

As for our magazine, we continue our commitment to give our readers information on news from the world of machine tools, steel and pipe and pipeline applications, more significant than ever at this time when contacts are limited. Don’t stop following us.