Resilience in the pandemic, between new business models, signs of recovery and opportunities
“If anything good has come out of this difficult time, it is the stimulation of creativity,” stated Dr Wilfried Schäfer, Executive Director of the VDW, (German Machine Tool Builders’ Association) at the METAV 2020 reloaded Preview on 10 December 2020. And it is true. Cecimo proves it, because represents the common position of European Machine Tool Industries and related Manufacturing Technologies, and promotes co-operation with other organisations worldwide, contributes to a business environment (legislation, innovation, environment, skilled workforce, financing, supply chain and infrastructure) that markets the most competitive manufacturing solutions worldwide, encourages research and innovation driven by the present and future needs of the market and works on global standards to promote a single European market open to global competition, engaging in the European and International standardisation bodies.
The additive manufacturing sector, for example, will be of great support in the implementation of the EU industry strategy helping supply chains to become more resilient and efficient. During the Additive Manufacturing European Conference (AMEC), that took place on 2 December 2020 online, both policy and industry representatives discussed the state of the art and emerging trends in AM in Europe.
In occasion of the sixth edition of AMEC, CECIMO, the voice of the European additive manufacturing sector, invited Members of the European Parliament as well as industry representatives to discuss the strategic importance of additive technologies for the European industrial competitiveness. The event was a great opportunity to discuss how the recent COVID-19 supply chain disruption in the healthcare sector could represent a wake-up call for other industries such as energy, medical and automotive industries. It was generally agreed during the discussions that Europe should channel investment in application of AM that could support the digital and green transition. The event was moderated by Fabian Zuleeg, European Policy Centre (EPC) and was divided into two sessions: policy and industry.
Stewart Lane, Chairman of the CECIMO Additive Manufacturing Committee and General Manager at Renishaw opened the industry session, calling on policymakers to embrace a forward-looking vision for the industry in Europe. He emphasised that ‘’It’s important to use legislation to enable the best use of the technologies such as AM, for example bringing manufacturing back to Europe, and keep an innovation-friendly regulatory framework’’.
Finally, Cecimo proposes a last passage on the theme of the pandemic and new business models during its general assembly, speaking of resilience in difficult times. On the policy side, the General Assembly has put the spotlight on the EU automobile industry at this critical juncture. The discussion focused on the challenges the wider automotive supply chain (including suppliers) faced during the coronavirus public health crisis. The auto industry has recorded its deepest crisis in history, highlighted by the strongest drop in car demand ever.
According to Eurostat, the European Union’s (EU27) Industrial Production Index (IPI) has decreased significantly in Q2 2020, recording an average drop of -19,1% against the same quarter of the previous year (down to an average score of 85,5 in Q2 2020 from 104,8 points in Q2 2019). New figures for Q3 2020 signal a weak manufacturing performance in the Union despite its relative improvement: IPI bounced back partially, reaching 99,3 points, but nevertheless decreased by more than -5% compared to the same quarter in the previous year. Concerning the capacity utilization rate of European investment goods sector, data provided by Eurostat show a similar trend. The operating rate of European manufacturing companies plummeted to 64,6% in Q2 2020, after recording a score of 83% in the previous quarter. The indicator has, much like the IPI, recovered partially over the second half of 2020, sitting at 78% as of Q4 2020, but far from pre-crisis levels.
In terms of machine tool order intake, CECIMO foreign orders dropped by -51% in Q2 2020 against Q2 2019, while domestic orders fell by -45% on the same basis. CECIMO total orders have dropped by -49% over the same period. The latest machine tool trade trends outline a similar scenario. According to UN/ITC figures, CECIMO world exports have decreased by -41% in Q2 2020 against the same quarter of the previous year, while CECIMO machine tool world imports contracted by -43% on the same basis. It is the sixth consecutive quarter with yearly negative growth and the largest rollback in global machine tool trade since the second half of 2009.
Considering figures provided by Oxford Economics, the European machine tool consumption is expected to decrease by -33,1% in 2020 due to the global effects of the pandemics, as overall volumes fall to 13 billion euros. By 2021, apparent consumption is estimated to increase by 23,5%, a strong push that, however, does not make up for the losses of the previous year. European machine tool consumption is forecasted to continue growing between 2022 and 2024, yet the growth pattern should flatten as the time progresses.
“The European machine tool industry -Marcus Burton, Chairman of CECIMO’s Economic Committee states- is a clear example of resilience; even though it has suffered the impact of the pandemic as well as the fallout of its client sectors’ woes, European machine tool builders are committed to technological innovation, digital change and environmental sustainability. This sends positive signals to investors and clients alike and shows that our industry offers new, potentially profitable business opportunities, even in trying times”.