Frankfurt, Germany - The German rubber & plastics machinery sector is expected to register a drop in sales of up to 10% this year, due in part to a decline in the automotive sector and the “image problems of plastics.”
The decline marks a reversal in the upward trend registered over the past 10 years, the German mechanical engineering association VDMA reported during its annual conference 14 June.
In 2018, the German rubber & plastics machinery manufacturers posted a 2% increase in revenue, a slight decrease from VDMA’s prior estimate of a 3% .
"Nevertheless, we are pleased about the positive all-year results as in particular towards the end of the year, deterioration of the market became already apparent," explained Ulrich Reifenhaeuser, chairman of VDMA Plastics and Rubber Machinery.
German manufacturers of rubber & plastics machinery suffered a 1% year-on-year decline in orders on their books during 2018, VDMA said, without giving figures.
This, said VDMA, marked an end to “the extremely long boom phase of… uninterrupted growth.”
In the first quarter of 2019, machinery makers registered a 10% year-on-year decline in order books, the association said, linking the fall to ‘automotive slowdown, image loss and trade conflicts.’
The cyclical downturn which was due after 10 years of growth, has been reinforced by “great insecurity presently prevailing in the automotive sector,” the German trade body said.
"Investments are virtually at a standstill," explained Thorsten Kühmann, managing director of the association.
Furthermore, the latent trade conflict between the US and China is causing shifts in supply chains and insecurity in markets globally.
In addition to that, In Europe, uncertainty continues over the withdrawal of the UK from the European Union and over “Italy's immense national debt,” the association pointed out.
In 2018, Germany's top export destination for rubber & plastics machinery was China, which registered imports of €853m, up 19% from the year before. The figure marked record sales to a single country.
In addition to exports, German machinery makers also produced more than €500,000 worth of equipment inside China, making the country “by far the most important overall market.”
Exports to the US fell 3% year-on-year to €820m in 2018, placing the country in the second position after three years of leading the table.