Source: AFM. Advanced Manufacturing Technologies. www.afm.es
THE MACHINE TOOL (INDUSTRY) ATTAINS THE BEST TURNOVER IN ITS HISTORY
The president of AFM, Antxon López Usoz is pleased with the good figures produced by the sector on analysis of the year-end closure 2017: “This is our best figure in 10 years, although in real terms we are still some way from achieving the historical result of 2008”.
Production in the advanced manufacturing and machine tool sector grew by 12.96% in 2017 (final figures), above the estimated growth forecast, reaching record levels for the sector of 1.69 million Euros. The high turnover increase has largely taken place due to the rise (+47.76%) experienced by the metal-forming sub-sector that in 2017 largely reduced the order backlog accumulated since 2016, the year which saw a 56% increase in orders (in metal-forming, the maturing period of the orders was around 18 months).
Metal cutting has also grown, but has done so more moderately, with a 4.71% increase in 2017 and, in spite of an erratic start, has risen in crescendo. The other sub-sectors also remained stable with positive figures, such as the components which grew by 4.54% and the cutting tools which rose 6.53%.
Employment, a factor of stability in the sector even at the worst times, continues progressing with an interesting increase of 4.1% in 2017.
EXPORTS CONTINUE TO BREAK THEIR OWN RECORD
Exports, also with substantial records in previous years, are growing more moderately, at 4.10%, but again reaching a record figure of 1.23 billion Euros. In addition, the results of the metal-forming (+10.28%) exceed those of metal cutting (+6.89%).
In 2017, the sector exported 72.95% of what was produced, given that this year sales in the domestic market have increased.
In the machine tool industry, exports increased by 8.03% in 2017 with the following main destination countries: Germany (which represents 14.4% of total exports), China (9.9%), Mexico (9.8%), USA (8.4%) and Italy (6.4%). Next are France, Portugal, the United Kingdom, Poland and India.
López Usoz confirms: “The European market has had a magnificent performance in 2017, both Germany, our main destination, which grew by 20% compared with 2016, and Italy, France, Portugal, the United Kingdom and Poland. China remains in second place in the world ranking although the figure has dropped by 7.7% compared to 2016. It was also a good year in Mexico and in the USA and Canada, which grew by around 15%. India is gaining ground as well, after experiencing a good year. For their part, Brazil and Russia have improved their figures but they are still a long way from recovering the levels reached in 2013 or 2014”.
EVOLUTION OF THE DOMESTIC MARKET
The final figures of 2017 confirm that domestic consumption grew by 24.43%, reaching a figure of 726.36 million Euros. This implies that it follows the trend of 2015 and 2014, overcoming the standstill of 2016. This is undoubtedly a positive sign, although it is far below the highest figures reached in 2007. In real effective terms it is estimated that there is still a room for 20-30%.
The fact that order intake in 2017 may not be able to boost a major progress in 2018 is worrisome, therefore decisive and high-impact measures are needed. The president of AFM states: “We think that it is clearly the time to implement forceful incentive policies for the investment in advanced production equipment within the Spanish market. This could include initiatives, similar to the Plan Renove, that draw on direct aids, as well as tax incentives such as the “hyper-amortisations”, in line with what was so successfully implemented in Italy. We are now in a transition towards a digitised and service industry, and in this context it is very important to upgrade old machines which are non-connectable, nor able to collect, process or send data to convert them into services and added value. We must not miss this boat”.
Following the atypical growth of 22% of order intake in 2016, due to the significant increase in the number of orders received in the metal-forming sub-sector (+56%, while the cutting dropped by 4%), the financial year of 2017 closed with an expected fall of 10% compared with 2016. However, the recovery of the metal-cutting sub-sector should be highlighted, which in 2017 captured a 10.7% more.
With regards to the different markets, the order intake has improved significantly in nearly all contexts. This improvement is most notable in Europe, which finds itself in a clearly expansionary phase, and somewhat less so in the NAFTA markets (USA, Mexico and Canada). Asia has delivered differing results, better for metal-cutting sector than for the metal-forming one.
For 2018 the prediction is for stability, we hope that the turnover figure of the sector is maintained at practically the same level as in 2017. The high turnover of 2017 for order intake in 2016 has meant lighter portfolios and this fact, along with a slight slowdown at the beginning of the year for incoming orders, indicates that maintaining a similar figure in 2018 to that of 2017 would be a good result. In any case, we find ourselves in a stable scenario and with favourable prospects for investment.
With respect to acquisition, as we described at the beginning of the year, it is still too soon to speculate, but we do not expect big changes considering the global growth scenario and above all, with Europe at the peak of a positive cycle.
Xabier Ortueta, General Director of AFM Cluster: “The year started off more quietly than expected, but the overall situation is good, both at a domestic and international level, and we must take advantage of that. We have the resources to continue demonstrating that we are very competitive in state-of-the-art solutions for the industry. That is beyond question. The fiscal year will be a positive one for advanced manufacturing in the world and the machine tool plays a fundamental role in its launch.”