The rise in turnover over recent years has come to a halt as German plastics and rubber machinery manufacturers had to resign themselves to a fall of six per cent.
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VDMA: German plastics and rubber engineering in a nosedive
"However, after 11 years of growth this break did not come as a surprise for the industry," said Ulrich Reifenhäuser, Chairman of the VDMA trade association Plastics and Rubber Machinery. "In many major customer industries, above all the automotive sector, signs suggested investment restraint, something that had already become clear for a while when looking at the order books. Moreover, there is the image problem of plastics."
This difficult situation is aggravated by the Coronavirus pandemic. Until June 2020, orders saw a decline of 20 per cent compared to the previous year. Thorsten Kühmann, Managing Director of the VDMA trade association, added: "The pandemic was the stab in the back for customer industries that had already been performing badly. However, we also notice that in times of the Corona crisis many plastics and rubber machines are being supplied particularly to the sectors of medical engineering and packaging.”
Concerning hygiene, plastics show their advantages, Kühmann continued: "This leads to a noticeable image improvement in society. However, we are aware that we are currently undergoing an exceptional situation and the shift in image will not have a long-term impact."
Shifting markets
In the first five months of the current year, German exports of plastics and rubber machinery fell short of the previous year by 19 per cent. Exports to China and the US decreased by three per cent each. For the Chinese market, positive signals can be perceived while the present decline in exports to the US is only the beginning.
The impacts on European countries strongly affected by the Corona virus are also reflected in export statistics. Deliveries to Italy, France and to Spain saw a clear drop. Markets importing over-proportionally more German plastics and rubber machinery in the first five months of 2020 compared with the previous-year period were Russia (+28 per cent) and Turkey (+102 per cent).
The pandemic alone provides sufficient insecurity for future economic development as the risk of a second wave looms. This is accompanied by sombre prospects for the automotive industry, as well as the persistently tense trade relationship between the US and China. In addition, the adopted tax on plastics is obscuring the situation. Manufacturers of plastics and rubber machinery have stated that they expect a turnover decline of up to 30 per cent in 2020.
The European Union is indicating a positive economic trend with the Heads of State and Government agreeing on an economic development plan to cope. A clear majority of plastics and rubber machinery manufacturers now expect a return to the turnover volumes of 2019 in 2022, and many expect incoming orders from West Europe and China later this year.
VDMA remains confident that machinery manufacturers will continue to contribute to a successful circular economy: ‘The innovative capacity of the industry remains unbroken and will lead the technology providers out of this crisis,’ a press statement read.
