The end of the year reports a drop of 21.4% in invoicing and 22.4% in exports
The provisional data for the machine tool sector reflect a decrease in invoicing of 21.4%, and 22.4%, in the case of exports. The difficulties and uncertainty caused by the pandemic have caused a significant drop in demand, a situation that has been aggravated by the severe restrictions on travel and sales, installation and maintenance of equipment. Although far from offsetting the evolution of the year, the last quarter has shown a certain recovery that has finally attenuated the tremendous initial impact of the confinement and allows us to start the year with renewed expectations.
The initial closing of the markets, the difficulties to travel and the fall in demand make 2020 the most complicated year in remembrance, according to provisional data from the machine tool sector analyzed by AFM.
The decline is generalized in all subsectors of the sector’s activity, although the deformation machines that already dragged decreases in the past two years are the ones that most await the beginning of the recovery. At startup, particularly milling, components and tools, they have held up somewhat better.
Csar Garbalena, president of the AFM.
No variation in exports
In 2020 the main export destinations have not undergone major changes: Germany, representing 12.1%, the United States, 10%, France, 9.7%, Italy, 7.4%, and China, 7%. Next, Mexico, 5.8%, India, 5.2%, Portugal, 5.1%, United Kingdom, 3.8%, and Turkey, 2.7% complete the list of the top ten client countries.
In this sense, it is necessary to emphasize that, unlike exports (they are the result of orders captured many months ago), the origin of the orders captured in 2020 has suffered a turnaround. China has relaunched its industrial activity earlier and with more force than other countries, which has placed it at the head of the collection, above Germany and with Spain in third place. They have been followed by the United States, Turkey, France, Italy and India.
The president of AFM, Csar Garbalena affirms: For a clearly exporting sector like ours, at this moment it is vital to regain normality in the markets and in professional travel, for the sale, installation and maintenance of production equipment.
The internal consumption of machines, in decline
After a bad 2019, investment in machine tools in Spain gave way again. On the one hand, the sales of national manufacturers in the domestic market suffer a similar drop to that of exports (-18.3%). On the other hand, the consumption of machines (production plus imports minus exports) loses more than 30% compared to the figure for 2019, data that points to a continued process of industrial decapitalization.
Garbalena insists on the importance of promoting the incorporation of state-of-the-art production equipment for the country’s industrial competitiveness and celebrates the recently announced National Renovation Plan: Investing in highly digitized and automated equipment, renovating and updating the machine park, is an urgent need as well as a great opportunity to transform the Spanish productive model. Spain needs to manufacture products with greater added value and technological complexity, billing more in advanced industrial services through digitization. After a decade of determined support for investment in machinery by the Basque administration, from AFM we applaud and appreciate the commitment of those who have agreed to provide a budget of 50 million euros for the first National Machine Tool Renewal Plan in history. The urgent implementation of this program within the first quarter could push demand, really in need of a strong boost.
Order intake decreases
The acquisition of orders in 2020 has deteriorated compared to that registered in 2019 by 23.5%. The domestic market, already at low levels, has fallen less (-12.11%) and it has been exports that have taken the worst part (-24.93%). By subsector, as in the last three exercises, it is deformation that experiences the most marked decline, driven by the situation of the automotive industry, while startup falls more slightly, thanks to its multisectoral positioning.
The pandemic has affected our client sectors unevenly, one of the major victims has been air transport with the consequent paralysis of new programs that has slowed down investments. The automotive industry, which has managed to recover its activity levels in the second half, has nevertheless reduced its investments, affecting the demand for large presses that had already accumulated two difficult years. At the other extreme, the energy sector, ICTs, and the agri-food industry show more robust behaviors.
2021, a strong commitment to the digitization of the industry
The new year has started with mixed feelings and the need for the markets to normalize and reactivate.
Everything indicates that 2021 will be the first year of recovery, although the first few measures have shown signs of uncertainty due to the reality of vaccination rates in Europe. The first quarter is expected to be the most difficult, to gradually improve as the year progresses. In this sense, the acquisition of orders that took place at the end of the year is important, which has given some oxygen to continue operating until activity and demand gain more strength. In any case, it seems that the sector will have to wait until 2022 for the return to true normality.
Regarding the long-awaited recovery, the president of AFM affirms: The NEXT Generation EU funds must help to recover the European economy in all its aspects, with special emphasis on industry, which is the engine of innovation, internationalization and wealth. To do this, it is necessary to promote ambitious and transformative projects in which SMEs can participate. The various programs of the central and autonomous administrations should also be endowed with abundant resources, to promote digitization and the sustainability of the manufacturing industry. Along these lines, from AFM we have coordinated the launch of a disruptive transformation project for advanced manufacturing, called e-machine Digital Workshop, in which we seek support to be able to invest 245 million euros that will take us to a leadership position in advanced digital products and services in the industry. Additionally, we consider that we are facing a unique opportunity to recover the greatly diminished support from ICEX to the internationalization of the industry, as well as to increase through CDTI the proportion of non-reimbursable financing for R & D & I for national and international projects that allow increasing the percentage of GDP invested by Spain in research, development and innovation activities.
The last quarter showed a clearly better behavior than the rest of the year
Related companies or entities
Spanish Association of Manufacturers of Machine Tools, Accessories, Components and Tools