STAGNATION AND CAUTION

Transcription

1 GRUNDFOS MACHINING INDUSTRY STAGNATION AND CAUTION UPDATE ON THE ECONOMIC SITUATION AND DEVELOPMENT IN SELECTED SECTORS business indicator report be think innovate

2 2 GRUNDFOS MACHINING INDUSTRY CONTENTS Economic Expectations for Key Countries and Industry Sectors Source: ZEW Indicator, ZEW, 13 October 2015) New Passenger Car Registrations in Europe Source: ACEA, 16 October 2015) Machine Tool Order Intake in Germany (Source: VDMA, October 2015) Fig. 4, Machine Tool Order Intake in Japan (Source: JMTBA, October 2015) Fig. 5, Machine Tool Order Intake in U.S.A. (Source: AMT, 12 October 2015) Fig 6, German Business Climate Industry and Trade (Source: Business Climate Indicator, Info Institute, 24 September 2015) Fig 7, The Grundfos Global Automotive Indicators (Source: Marklines.com, October 2015) Fig 8, The Grundfos Raw Material Price Index (Source: London Metal Exchange, Steel Business Briefing, CME Group, October 2015) ABOUT GRUNDFOS INDUSTRY INDICATORS This quarterly newsletter can give you a general idea of which way the wind is blowing in the machine tools industry. It is a special supplement to our subscribers of Knowledge Link, our website for the machining industry. Almost all the charts and graphs here are publicly available. They come from the three major machine tool associations in Germany, Japan and the United States as well as global surveys from market analysts. We make the final graphs ourselves, the Grundfos Raw Materials Index and the automotive Monthly Production Output by country and manufacturer. We build the latter up from available automotive production figures. Grundfos Machining Industry segment uses automotive production statistics, because that market is such a big part of the machine tools industry. Based on that, we try to estimate how the coming one- to three months will look. Why do we want to share these statistics? Because we have a common interest in seeing how the market is doing. So please: read these statistics and comments as indicators alone. The Grundfos Industry Indicators Copyright 2015 Grundfos A/S. Permission to reprint graphs, tables and data has been granted to Grundfos from the various organisations represented in the publication. If you have comments or questions on the data from those organisations, please contact them directly with the links provided. We welcome your other comments.

3 3 GRUNDFOS MACHINING INDUSTRY Grundfos analyst: Difficult Market Conditions The current economic situation and market expectations are characterised by stagnation and caution in many parts of the world - unchanged from last month. Although the number of new car registrations in the EU has grown, global car production has eased, leading to decreasing orders in the machining industry. There is no short-term improvement in sight for the overall market situation. Frank Baake, Senior Strategy & Intelligence Analyst 1 Economic Expectations for Key Countries and Industry Sectors The Centre for European Economic Research (ZEW) writes, The ZEW Indicator of Economic Sentiment for Germany has further declined in October Decreasing by 10.2 points compared to the previous month, the index now stands at a level of 1.9 points. "The exhaust gas scandal of Volkswagen and the weak growth of emerging markets has dampened economic outlook for Germany. However, the performance of the domestic economy is still good and the Euro area economy continues to recover. This makes it rather unlikely that the German economy will slide into recession," says ZEW President Professor Clemens Fuest. Financial market experts' sentiment concerning the economic development of the Eurozone has weakened. ZEW's Indicator of Economic Sentiment for the Eurozone has decreased by 3.2 points to a reading of 30.1 points. The ZEW Indicator of Economic Sentiment is ascertained monthly. Up to 350 financial experts take part in the survey. The indicator reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic for the expected economic development in Germany in six months. The survey also asks for the expectations for the Euro-zone, Japan, Great Britain and the U.S.A. For more information, visit ZEW s website at zew.de.

4 4 GRUNDFOS MACHINING INDUSTRY ZEW Indicator of Economic Sentiment (Germany)

5 5 GRUNDFOS MACHINING INDUSTRY 2 New Passenger Car Registrations in Europe In September 2015, the EU passenger car market showed another strong month (+9.8%), marking the 25th consecutive month of growth. Demand for new passenger cars was up in all major markets, driven by ongoing scrappage schemes and by the economic recovery of Southern Europe. Registrations in Spain (+22.5%), Italy (+17.2%), France (+9.1%), the UK (+8.6%) and Germany (+4.8%) increased when compared to September Across the region, new passenger car registrations totalled 1,356,868 units. Over the first nine months of 2015, new passenger car registrations increased (+8.8%), surpassing 10 million units (10,413,675). However, this is still far from the pre-crisis level of almost 12 million units registered during the same period in All major markets posted growth, contributing to the overall upturn of the EU market over the first three quarters of the year. Spain (+22.4%) and Italy (+15.3%) benefit from strong growth and posted double-digit percentage gains, followed by the UK (+7.1%), France (+6.3%) and Germany (+5.5%). For more information, see ACEA s website at acea.be. 3 Machine Tool Order Intake in Germany For the German Machine Tool Industry, the order intake in August was +2.1% compared to the same month in For the first eight months of the year it was -0.5%. For more information, please visit the VDMA s website at vdma.org.

6 6 GRUNDFOS MACHINING INDUSTRY Machine Tool Order Intake in Japan 4 The order intake for the Japanese Machine Tool Industry in September 2015 was -19.1% compared to September 2014 (+2.5% from August 2015). For more information, please visit the JMTBA s website at jmtba.or.jp In the 9 months of 2015 the growth was +5.8%. Machine Tool Order Intake in U.S.A. 5 August U.S. manufacturing technology orders totalled $ million according to AMT The Association for Manufacturing Technology. This total, as reported by companies participating in the USMTO program, was down 10.2% from July s $ million and down 21.2% when compared with the total of $ million reported for August With a year-to-date total of $2, million, 2015 was down 10% when compared with While there is a sense of unease in manufacturing now as indicated by this reduction in orders combined with drops in the PMI and industrial production, some levelling after a period of strong growth is expected and helps build stable longer term growth, said AMT President Douglas K. Woods. We are a diversified industry, and pockets of manufacturing continue to show resilience, such as automotive stamping and medical devices. While there is some cause for caution, we do not anticipate more than market flatness into the early part of The United States Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associations representing the production and distribution of manufacturing technology, provides regional and national U.S. consumption data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology consumption provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity. For more information, visit the website at amtonline.org.

7 7 GRUNDFOS MACHINING INDUSTRY 6 German Business Climate Industry and Trade Ifo Business Climate Germany: The Ifo Business Climate Index for German industry and trade rose in September to from points (seasonally revised) last month. Companies assessed their current business situation slightly less favourably than in August. However, they expressed greater optimism about future business developments. The German economy is proving robust. In manufacturing, the business climate continued to deteriorate slightly. Manufacturers scaled back their very good assessments of the current business situation, but were more optimistic about short-term business developments. More companies plan to ramp up production in the months ahead. The Ifo Business Climate Index is based on ca. 7,000 monthly survey responses of firms in manufacturing, construction, wholesaling and retailing. The firms are asked to give their assessments of the current business situation and their expectations for the next six months. They can characterise their situation as good, satisfactorily or poor and their business expectations for the next six months as more favourable, unchanged or more unfavourable. The balance value of the current business situation is the difference of the percentages of the responses good and poor ; the balance value of the expectations is the difference of the percentages of the responses more favourable and more unfavourable. The business climate is a transformed mean of the balances of the business situation and the expectations. For calculating the index values, the transformed balances are all normalised to the average of the year The CESifo Group, consisting of the Centre for Economic Studies (CES), the Ifo Institute for Economic Research and the CESifo GmbH (Munich Society for the Promotion of Economic Research) is a research group unique in Europe in the area of economic research. It combines the theoretically oriented economic research of the university with the empirical work of a leading Economic research institute and places this combination in an international environment. For more information, visit the website at cesifo-group.de.

8 8 GRUNDFOS MACHINING INDUSTRY 7 The Grundfos Global Automotive Indicators Data source: MarkLines Co. Ltd The six main manufacturers produced -4.2% in July (vs. last year). For the first seven months of 2015 it is -0.5%. Production in the four main vehicle-producing countries decreased by -1.9% in August compared to same month last year and showed almost no growth (+0.1%) for the first 8 months of the year. Data source: MarkLines Co. Ltd

9 9 GRUNDFOS MACHINING INDUSTRY 8 The Grundfos Raw Materials Price Index Raw Materials Update Source: London Metal Exchange, Steel Business Briefing, CME Group. July 2014 = 100 Raw Materials Price Index, general status October 2015 Source: London Metal Exchange, Steel Business Briefing, CME Group. Grundfos Sourcing Analyst Chadarat Näf-Sangkrit comments on the price fluctuations of raw materials and their impact on the manufacturing industry. She writes: In September, we see no drastic change among the commodity prices, ranging from -4.8 % to +2.3%. The average increase of crude oil price draws attention, however, as the first increase since May. Market analysts expect the price to lay low for the rest of 2015 due to the current oversupply, despite a slowdown in US oil production. Other notable fluxuations include the following: Nickel: This is the first time in more than five years that an average monthly nickel price dropped to below 10,000 USD per ton, ending at 9,932 USD/t. The September average price is now 48.1% below the July 2014 price. Copper: After going down for three months straight, copper price in September finally finds itself on increasing footing. Copper price in September increased by 2% compared to its previous month. Brass (Base Barra OT): After marking its 5-year low last month, the price picked up to a positive side with a 0.6% increase compared to the previous month. However, it is still 12% lower than its price in July 2014.

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