Frankfurt, Germany – Following an ‘unsurprising' 6% decline in 2019, the German rubber & plastics machinery industry is now in a "nosedive" due to the Covid-19 global pandemic, according to the mechanical engineering industry association VDMA.
"The pandemic was the stab in the back for customer industries that had already been performing badly,” said Thorsten Kühmann, managing director of the VDMA trade association plastics & rubber machinery.
In the five months to end of May, orders saw a decline of altogether 20%, with all markets registering negative trends, VDMA announced 5 Aug.
The local German market saw orders fall 21%, while international exports declined 20%, reflecting 3% decreases in exports to China and the US each.
While positive signals are seen in the Chinese market, VDMA said the present downtrend in exports to the US “is only the beginning.”
In Europe, deliveries to Italy, France and Spain fell 31%, 42% and 48% respectively, demonstrating “a clear drop” in demand.
Exports of machinery to India also saw a drastic decline at 73% in the first five months of the year, VDMA said.
By contrast, Russia and Turkey imported German machinery “over-proportionally”, with the two markets registering year-on-year increases of 28% and 102% respectively.
While the slow automotive demand is driving down machinery sales, VDMA said it noted that many machines are being supplied particularly to the sectors of medical engineering and packaging.
According to the trade association, the looming second wave of Covid, “somber prospects” for the automotive industry, the US-China trade war and an adopted tax on plastics are some of the key challenges faced by the sector.
In view of the market situation, VDMA said, the majority of rubber & plastics machinery makers expect a turnover decline of up to 30% in 2020.
In addition, an 80% majority of the manufacturers expect a return to the 2019 revenue levels in 2022 at the latest.