During the annual press conference of the VDMA Precision Tools Association in January, Markus Horn, European Cutting Tools Association (ECTA) president, gave an overview of the economic situation of European cutting tool manufacturers.
In a cautiously optimistic presentation, Horn reported that the tooling industry in ECTA member countries continued its recovery moderately in 2022, thanks to a good second half of the year. However, the ongoing supply chain issues and the war in Ukraine had dampened this recovery.
Overall, the European tooling industry was able to increase cross-border deliveries of cutting tools by 4%, now just 2% below that of the record year reported in 2018. Domestic deliveries within the EU were weaker, however, with an increase of only 3%, but were almost back to the record level of 2018.
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“Even though growth rates were small last year, the European domestic market remains the most important. As before, two out of every three European tools made in the EU are still used within the EU,” Horn stated.
“Deliveries to the UK, on the other hand, fell by 5%, indicating that Brexit has begun to have an impact on our industry,” he continued “The top non-EU markets, the US and China, showed the same trend for European tool manufacturers in 2022 as we saw in Germany. While the US was a growth driver, the Chinese business was significantly adversely affected. A good example of this was Italy’s exports, which grew by 6% overall. Its shipments to the US grew by 8%, while its business in China fell by 8%. Spain also recorded a similar situation.”
European cutting tool markets
In Germany, demand for tools in the mechanical engineering sector continued to rise. In the second half of the year, production in the automotive industry, which is important for machining, also recovered. “We expect it to stay on track in 2023,” was the message from Horn.
In Italy, government tax incentives resulted in strong tooling business with industrial equipment suppliers for almost the entire year. These tax credits, albeit reduced, are continuing in 2023 and offer potential for further stimulus, it was stated.
In Spain, preliminary data was reported to show that the cutting tool production increased 1.67% in 2022, while exports grew 5.2%. In France, the recovery of the aerospace business continued and the French automotive industry produced more vehicles again.
Switzerland showed a stable development, however, in Britain, the problems caused by Brexit prevented a recovery. Car production, an important customer sector in the UK, was again significantly down on the previous year.
“Unfortunately, forecasts for 2023 do not predict any improvement,” added Horn.
Discussing the challenges and current issues facing the industry, Horn was keen to highlight the red tape facing many in the sector: “Reducing bureaucracy is also a matter of great concern to me, because we have to ensure the international competitiveness of European companies!”
Sustainability and outlook
“The EU Green Deal has reached our customers and the topic of sustainability documentation is gaining momentum,” reported Horn. “Currently, many companies are well positioned with environmental management system certification in accordance with the international standard ISO 14001.”
Offering a positive outlook for the coming year, Horn stated, “Overall, we Europeans remain optimistic that we can continue our growth in 2023.”