Spanish Machine Tool Sector Expects Sales to Increase by 15 percent

San Sebastian, Spain – The Spanish machine tool sector’s final year-end figures have affirmed what the industry anticipated in February with the provisional figures: ultimately, sales were 19.65 percent lower than 2019. In absolute terms, the sector’s final sales figure in 2020 was €1,324.12 million, compared to €1,647.86 million in 2019. The drop in the country’s production was in accordance with the worldwide drop in manufacturing, which was 19.18 percent. In the metal-forming subsector, the drop is slightly more pronounced, which at €311.07 million, fell by 21.82 percent and in the metal cutting machines at €559.42 million, fell by 18.68 percent. All other sub sectors fell in comparison to 2019: components and tools were -15 percent, other machines were -17.72 percent, accessories were -52.76 percent, and machining & other services were -9.31 percent.

Exports decreased by 22.25 percent to €1,006.01 million, compared to the €1,293.93 million recorded in 2019, and they represent 76 percent of overall production, because of travel and transportation restrictions. In this case, metal cutting and metal forming experienced similar decreases of 22.57 percent and 22.44 percent, respectively. National manufacturers’ sales in the domestic market are 13.41 percent down in 2020. In Spain, apparent consumption (production+imports+exports) of machine-tools has fallen by 31.13 percent.

Export Markets

In 2020, Germany accounted for 11.8 percent of the country’s export sales, followed by the United States (10.3 percent), France (9.1 percent), Italy (7.3 percent), and China (7.3 percent). Mexico, Portugal, India, UK, and Russia round out the top ten exporting countries. New orders for the year show a different trend, with a significant surge from China, which has surpassed Germany and the United States to take the market lead, followed by Turkey, France, Italy, India, Russia, and Canada. The rapid reactivation of industrial activity in China has allowed it to invest extensively, giving it a competitive advantage over other countries.

Consistent International Positioning

Despite the pandemic’s onslaught, Spain has maintained its position as the world’s tenth manufacturer and exporter, retaining its market share. The five major manufacturing countries have held their positions in the ranking: China, Germany, Japan, the United States, and Italy, with the latter two switching positions in 2019. The declines in production in these five countries are also significant, particularly in Germany (-30.9 percent) and Japan (-29.3 percent). Italy demonstrated a similar drop to Spain (-23 percent), the United States (-9.4 percent), and China has a very slight drop (-1.3 percent). In 2020, global consumption fell by 20.1 percent, a significant decrease from the 2009 slump. The forecast for 2021, on the other hand, points to 15 percent growth, which would result in a 7.5 percent increase in 2022, though the rate of recovery is expected to vary significantly between the three major areas of consumption: Asia, Europe, and America.

Orders Overview

Orders recorded in 2020 fell by 23.5 percent compared to 2019 figures, according to preliminary data released in February. Metal-forming was the hardest hit subsector, with a 34.7 percent drop, while metal cutting fared marginally better, with a 17.65 percent drop. At the beginning of October 2020, orders began to steadily recover, and this positive dynamic has been sustained throughout the first term, with order figures comparable to 2019. The duration of this upswing remains to be seen, but it may be due in part to the rebound effect of the global industry lockdown in the first half of 2020. Along similar lines, the European counterparts are reporting significant increases in orders: Italy reported a 48.6 percent increase in orders received in the first quarter of 2021, and Germany anticipates that the rate of orders from China will have a positive impact in the coming months. The Spanish machine tool sector’s forecast indicates a significant increase in orders received, around 25 percent, for 2021 overall.

The Recovery Path in 2021

The strong increase in demand on the Chinese market, as well as the expectations generated by Joe Biden’s plan to boost the US economy, are pointing to a strong recovery in the global economy, which should be accompanied by greater momentum in Europe, fueled by the acceleration of vaccination processes and the establishment of recovery funds. The favorable but disparate number of orders received in the previous six months raises the forecast sales for 2021 to around 12-15 percent, depending on what happens in the second quarter. In terms of user sectors, although the automotive industry has returned to pre-pandemic levels of activity, the transition to electric & hybrid vehicles, on the one hand, and changes in the mobility model, on the other, are making it difficult to predict vehicle demand, which is slowing investments. The aeronautics sector, for its part, has felt the impact of the decline in mobility, and forecasts for the next 2-3 years, aside from the defense sector, are not promising. The railway sector, on the other hand, is doing well, whereas the energy sector, despite recording disparate realities, is still demonstrating a gradual inclination toward renewable sources.

R3, Sustainable Digital Manufacturing Industry Relaunch Plan

Machine Tools, Accessories, Component Parts and Tools manufacturers’ Association of Spain, AFM Advanced Manufacturing Technologies, has been working in recent months on developing and presenting a strategy to reactivate manufacturing activity to defend the industry as the backbone of all developed and sustainable economies. In the short term, this strategy includes numerous activity and job support measures, re-equipping the industry base, and an ambitious sector transformation project known as the ‘e-Machine Digital Workshop,’ which focuses on digitalization and sustainability. AFM Cluster, the organization that represents the interests of advanced and digital manufacturing in Spain, continues to work to secure the goals set in its work to support the sector’s businesses.

Image Source: AFM Cluster