This document contains the presentation given These are the - - PowerPoint PPT Presentation

1

This document contains the presentation given by the CELIMO Secretary at the annual Council Meeting. It also includes notes (and where they were used, slides) from the individual delegates, so it forms part of the minutes of this meeting.

2

These are the countries covered by the survey. Where no return is provided, the data comes from a variety of sources including: · CECIMO and other national associations · Gardner Research World Machine Tool Survey · Private databases of official statistics

3

The chart shows the total value of imports of machine

tools, measured in Euro. Machine Tool Imports into the CELIMO countries (including those from other CELIMO countries) grew by +0.6% in 2016 to a total of €9.8 billion, the highest level since 2007. Machine tool imports fell in six of the CELIMO countries and increased in five. The largest increase in machine tool imports in percentage terms was in Spain +16%), with the most rapid fall in Finland (-24%). China and the USA saw machine tools imports fall in

2016 and there was also a small reduction for the

• ther Asian countries combined (JP+KR+TW+IN).

4

These are the six largest machine tool importing countries in CELIMO in 2015, although it is worth noting that the figure for Belgium is heavily affected by warehousing operations (and there also appears to be a discontinuity in the data between 2011 and 2012). Germany remains, by far, the largest machine tool importer in Europe and, ignoring Belgium, Italy is the only other country where machine tool imports are worth more than €1 billion, but the total is still less than half of that in Germany. The order of these countries was unchanged between 2015 and 2016

5

This charts the trends for imports of machine tools into the other 6 CELIMO countries. They are ranked in order of the 2016 level of imports and we have seen Spain move up two places in this chart. Switzerland is the only country on this chart where the data is affected by changes in the exchange rate, although the major change in 2015 was not reflected in trade levels until 2016 (this makes sense given the long backlogs in the machine tool industry). It is worth noting that the Dutch figure is also affected by warehousing and port operations, although not to the same extent as for Belgium.

6

The share of the European machine tool market which is accounted for by imports fell slightly in 2016, but remains around two-thirds. After adjusting for those countries where this measure is distorted (Belgium, Netherlands and Sweden), the ratio fell to 55% in 2016. Italy (39.2%) and Germany (41.3%) have the lowest import ratios among the individual CELIMO countries and are the only ones below 50%. For Belgium and, to a lesser extent, Netherlands, the effect of warehousing and port operations gives a market share of >100%; it is not clear why the import ratio in Sweden is above 100%, although the import data comes from a different source to that used for production & exports.

7

We have data for the source of imports into the CELIMO countries, although not the value of imports from the smaller European countries which were not included in the analysis, except where some respondents have given the data for one

• r two extra countries. Another complication is the re-

exports from Belgium; some of these originated in Europe, while others came from outside the region. Including all imports from Belgium, 62.6% of total imports into the CELIMO countries came from elsewhere in Europe; excluding all imports from Belgium reduces the percentage to 60.4%. However, allowing for “genuine” exports from Belgium of machines originating in other European countries, we can be fairly certain that the final percentage is likely to be around 62%. Germany remains the most important source of imports into the CELIMO countries, with Switzerland the most important source of machine tool imports into Germany.

8

This is calculated using Production - Exports + Imports; any issues with any of these series can affect the result. Other Asia in this case is defined as South Korea + Taiwan + India. Machine Tool Consumption in the CELIMO area grew by +2.0% in 2016 to €14.9 billion, the best since 2008, but still a long way

• ff that figure (which was €16.7 billion).

The machine tool market grew in 6 of the CELIMO countries and fell in 6; the largest increase was in Italy in both percentage and value terms, while the largest decline in percentage terms was in Finland and by value in Switzerland. Outside of Europe, South Korea and Taiwan saw a fall in machine tool demand and the fastest growth was in India (at +13.1%), but in value it was the USA (+€504 million). The report contains similar charts for production and exports.

9

The average rate of growth for the CELIMO area is slightly misleading because the CELIMO average is not weighted to take account of the different sized economies. However, for the region as a whole, the pace of growth slowed very slightly in 2016. Sweden (+3.3%) was just ahead of Spain (+3.2%) as the fastest growing European economy in 2016, followed by Turkey at +2.9%. India remains ahead of China as the fastest growing economy across our study, but slower growth in China is inevitable.

10

As an aside, a reminder that although the percentage change in Chinese growth is slowing - and, therefore, attracting the headlines - the actual value increase is at a record high level. We would expect to see a similar phenomenon affect India in the not too distant future.

11

This chart shows the annual average exchange rates for 4 key global economies against the euro. The Euro weakened significantly against the Japanese ¥en and strengthened vis-à-vis the GB£ (although the latter has more to do with weakening of Sterling following the Referendum vote to leave the European Union). The dramatic changes in the value of the Swiss Franc which took place in January 2015 when the Swiss Central Bank reversed its policy of support for the currency has been followed by a period of relative stability. Of course, changes in the exchange rates also have a significant impact on machine tool importers in Europe, making imports more or less expensive.

12

This chart shows the growth rates for total output of the manufacturing sector in 10 of the larger

• economies. The chart highlights different

experiences for the European countries over the past 3 years. The European picture is very mixed, with growth picking up in countries such as Italy and Spain which have been relatively late in recovering from the recession, but slower growth being recorded in Germany, the UK and, in 2016, in Turkey.

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In Europe, only Austria has a ratio that is close to the Chinese, Taiwanese and Korean economies which are all above 30%. Germany leads Japan, with Hungary the only other countries where the ratio is above 20%. Six European countries have a ratio below 15%, with the UK lowest of all at 9.1%; outside of Europe, only the USA is below 15%.

14

From the returns received, 9 CELIMO countries were able to identify the major customer sectors in their country. The automotive sector still dominates the list of end-user sectors, although it is not present in every country. Aerospace is important for France, Spain and the UK, Sub- contractors are mentioned in Finland and Sweden (and in the UK where they are classified as part of the Metal Products industry) and the Mould Making sector is important for Spain, Switzerland and Turkey. Looking at the output trends, the Automotive sector continues to grow where the data is reported. The other user-industries have contracted for two years in a row in Italy, but grew in Turkey; there is a mixed picture for the UK where Aerospace reached record high levels of output, but the Machinery industry saw another fall in output in 2016 as it faces the headwinds of low oil prices and weak global demand for equipment such as construction and mining machinery

15

This analysis is based on a breakdown from 8 countries (Austria, Belgium, Finland, Italy, Spain, Sweden, Turkey and the UK). It may not be completely reliable but is a useful guide to the structure of the member associations. It provides a useful analysis for our relationships with other organisations, most notably perhaps,

• CECIMO. More than ¼ of our members are

subsidiaries of machine tool manufacturers, a good proportion of which are likely to be members of the CECIMO associations (CECIMO

• nly covers machine tools).

Overall, 42% of the CELIMO members are independent companies.

16

We have already looked at the annual GDP data for the CELIMO area as a whole, but this chart shows how growth has been broadly flat, but at a reasonable level. After a burst of activity at the start of 2015, European GDP overall has settled down to a rate of just under +0.5% per quarter.

17

Total industrial production includes all manufacturing activity, plus the supply of energy and other utilities such as water and the output of the extraction industries. Although this monthly series is quite volatile, there is a clear upward trend running from the start of 2016 following a period in 2015 when it looked to have reached a plateau. However, there is still some way to go for total industrial production to get back to its pre- recession levels.

18

This chart looks at the data for 4 key industries within the manufacturing sector as a whole; this chart shows the trends for the EU28 as a whole. However, looking at the individual industries, we get a different picture. Both Automotive and Other Transport Equipment (which is dominated by Aerospace) reached record levels in Q3-16 and although they both dipped slightly in the final period

• f the year, output remains at a high level.

In contrast, the Machinery and Metal Products industries have been broadly flat since the post- recession bounce ended in 2012 and 2011 respectively.

19

We only have this data for the euro-zone

• countries. Ignoring the sharp rise in the

investment rate at the end of 2016 (caused by transactions from outside the EU to Ireland), there has been little in the way of recovery and the level was lower than in 2011. The data on profit share is a little more positive, but although the latest figure is the highest since the 3rd quarter of 2008, this too is still short of its pre-recession levels. On a more positive note, the European Commission report shows a noticeable upturn in industrial confidence over the past 6-9

• months. This follows a generally level period

from 2014 to the middle of 2016.

20

Capacity utilisation rates dipped in 2012-13, followed by a sharp recovery at the end of

• 2013. Since then, the trend has been more

positive and is now in a range that might be considered “normal” - it was last at this level in the 2002-06 period.

21

Direct comparisons between countries figures are not really valid - you need to consider where the country is in relation to its own data series. This chart shows the current level of the indicator (red line), with the minimum and maximum levels recorded since 1990 at the bottom and top of the blue line. For example, although capacity utilisation in France is higher than in Latvia and Lithuania, in the latter two countries it is at its highest level since 1990. Generally, capacity utilisation is high, with Denmark, Portugal and Romania perhaps the most notable exceptions.

22

According to the bi-annual investment survey carried out for the European Commission, the

• verall assessment of the investment trend for

2017 has edged up since the previous survey in the Autumn of 2016. The following are the main trends:

• France, Germany and Netherlands are now

more positive

• Italy and Sweden are less pessimistic
• Spain and the UK are less positive
• Belgium appears to have been too
• ptimistic last Autumn!

As this is a European Commission project, we don’t have any data for Switzerland or Turkey.

23

Data from Eurostat on the level of the Government debt and the deficit on Government spending across Europe highlights the extent to which most of the economies are still above the maximum levels of debt which were set for European Monetary Union, although the performance on the deficit is slightly better. According the Maastricht Treaty, Government debt was not supposed to exceed 60% of GDP, while the deficit on Government Spending was limited to -3%. In 2016, only Sweden and Finland had deficits below the 60% threshold for debt; for the deficit, there are more countries which meet the criteria as Europe battles to gets its government finances in

• rder.

The largest public debt ratio is in Italy at 132.6%, with Belgium at 105.9%; on the deficit chart, Spain (-4.5%) and France (-3.4%) are over the target, with the UK at 3.0%.

24

The latest PMI data for the Euro-zone reached a 6-year high level in April 2017 at 56.7. This is another data series where, to some extent, the relative position is more important than the absolute level, although the dividing point of 50 is always crucial. The Euro-zone PMI is clearly in very positive territory, having been on an upward trend since late 2016.

25

This has been reflected across the Euro-zone (note: this actually only covers 8 countries - the 7 in the chart above plus Greece), with rising rates in most cases. France, which for some time was anchored to the bottom of the chart, has recovered recently, with a 2nd burst of improvement in 2017. Spain now has the lowest PMI of these 7 countries, but it is somewhat unfair to regard a PMI reading of 54.5 as anything other than significantly positive as it still implies a healthy level of expansion of activity in the manufacturing sector.

26

27

The slides which follow were used as the backdrop for the individual national reports. We have added the comments which were made to the relevant slides; where the delegates made a presentation, this will be included in the pdf version of this report at the appropriate point.

Mr Meert commented that a small acceleration in GDP was expected in 2017. Inflation is already high because of taxes on energy bills and is likely to rise further in 2017, but unemployment is falling. The Agoria Barometers are showing a slightly upward trend overall; ICT and Machinery are positive, automotive is mixed. Looking at production by sector, automotive output grew by +3.5% in 2016, but is expected to decline by -5% in 2017; this is mainly because both Volvo and Audi are changing platforms in 2017, so there will be a recovery in 2018 when those models are fully on stream. The fall in Machinery output expected in 2017 (-4.5%) is due to the closure of the Caterpillar Factory.

STATE OF TRADE BELGIUM

General data 2016 & 2017 (National Bank):

2016 2017 (F) GDP (%) +1.2 +1.5 INFLATION (%) +1.8 +2.5 UNEMPLOYMENT (%) 7.8 6.9

Data for Belgium

• We have no data for machines or tooling at the

moment.

• We hope to start collecting them again this year

Synthetic barometer for all AGORIA sectors

• Mill. euros, at current prices

Source: The Federation of Finnish Technology Industries

Finland: order stock in the mechanical engineering

• Mill. euros, at current prices

Source: The Federation of Finnish Technology Industries

Finland: value of new orders in the mechanical engineering

Index, 2010 = 100 Lähde: Statistics Finland

Finland: production in the mechanical engineering

Machinery Fabricated metal products Transport equipment

• Mill. Euros in current prices

Finland: fixed investments in manufacturing industry

Lähde: Confederation of Finnish Industries

Estimates Investments in national accounts

Sales index, 2010 = 100

Finland: sales of machine tools, expectations for sales of investment goods

sales index of machine tools expectations for sales of investment goods, next 12 months Source: Association of Technical Traders, Machine tool section Source: Association of Technical Traders, Machine tool section

Finland: sales of machine tools, expectations for the next 12 months

• FIGURES AND

INDICATORS

GERMANY

GERMAN EXPORTS - MARCH 2017: +10.8% ON MARCH 2016

FOREIGN TRADE - HIGHEST EXPORT SURPLUS OF EU COUNTRIES IN 2016 PRODUCTION INDEX PRICES - MARCH 2017: +1.6% ON MARCH 2016 NATIONAL ACCOUNTS - THE GERMAN ECONOMY CONTINUED ITS MODERATE GROWTH

LABOUR MARKET - 1.70 MILLION PEOPLE WERE UNEMPLOYED IN MARCH 2017 LABOUR MARKET

• Source: Funcas

www.aimhe.org

Source: Funcas 3

General and Industry Indicators

These charts cover: 1) the general economic sentiment and PMI indicator 2) Industrial production trend and manufacturing turnover 3) Consumption of energy and fuel

www.aimhe.org

Source: Funcas 4

These charts cover: 1) GDP (PIB), productivity and employment 2) Exports and Imports 3) Two measures of inflation (the headline rate is in blue) ______________________________ The largest sectors in Spain are Automotive, Aerospace and Moulds & Dies - if Portugal is included (as many Spanish dealers also cover Portugal), Moulds & Dies moves to 2nd place. Within Spain, Catalunya and the Basque región account for 60% of the machine tool market.

www.aimhe.org

5

FORECAST FOR 2017 GDP Evolution 2,8 % Employment 2,4 %

Unemployment rate for 2017: 17,5 %

Consumer prices Index 2,7 % Industrial Production Index (IPI) 1,8 % Purchasing Managers Index (PMI) 54,7 Imports in capital goods 9,0 % Exports (goods)

customs value

12,6% Imports (goods)

customs value

15,1% Domestic sales of capital goods 2,6%

Source: Funcas

www.aimhe.org

▪ Imports in capital goods (equipment): Very good data for January and February 2017. There is a recovery. However, february´s data indicates that there is a slowdown of domestic sales in capital goods. ▪ Industrial Production Index: Bad data in March due to energy. Good data in manufacturing with accelerated economic activity. ▪ PMI in manufacturing: There is a recovery in April after a correction in Feb-

• March. Upward trend.

▪ Business Confidence Indicator: There is a rising trend despite the bad data for March-April. ▪ GDP- 1st Qarter 2017: Spain's gross domestic product in the first quarter of 2017 has grown by 0.8% over the previous quarter. This rate is 1 tenth higher than the fourth quarter of 2016, which was 0.7%.

2017 TRENDS

6

MACHINE TOOL DATA 2016

7

DOMESTIC MARKET:

After three years of clear recovery and very high relative growths, the domestic consumption came to a standstill in 2016, finally remaining at 584 million Euros, a figure that is clearly insufficient for a country that strives to be industrial. These figures, despite doubling the amounts that were registered in the worst time of the recession, are still much lower (around 40%) than the consumption figures that Spain registered prior to the recession. Spain needs a decisive boost to invest in production equipment with a ripple effect.

SPAIN MACHINE TOOL DATA 2016

8

Source: AFM

SPAIN MACHINE TOOL DATA 2016

9

Source: AFM

SPAIN MACHINE TOOL DATA 2016

10

Source: AFM

SPAIN MACHINE TOOL DATA 2016

11

Source: AFM

SPAIN MACHINE TOOL DATA 2016

12

Source: AFM

SPAIN MACHINE TOOL DATA 2016

13

Source: AFM Imports by sector: Source AIMHE

SPAIN MACHINE TOOL DATA 2016

14

Source: AFM Imports by Comunities/Regions: Source AIMHE

FORECASTS FOR 2017

15

Source: AFM ▪ Perspectives for 2017 are optimistic. ▪ According to AFM, 2017 a growth in turnover between 8%‐10% is forseeable in 2017, tapping into the pull of the capture of the metal forming subsector. Likewise exports will also increase. ▪ 2016 has shown an interesting growth in machine orders, with an increase of more than 22%. This unusual figure is due to an extremely high investment of the automotive sector, which has drawn large press manufacturers and the metal forming subsector, in general, with it. This circumstance has led to a major increase in

• rders (+56%) and the largest capture ever registered by the
• subsector. Metal cutting, however, has had a complicated year in

many of its main markets, registering a drop of 4.7% in capture in 2016.

2.2 4.6 2.9 6.1 2.9

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2012 2013 2014 2015 2016

• DuetothechangeofthebaseyearconductedbyTurkStat,therearedifferencesin

thedatafor2015and2016.

• 2

1.7 3.7 3.7 5.9 3.9 2.1 4.2 2.9 6.1 2.9

1 2 3 4 5 6 7

2012 2013 2014 2015 2016

%

ProductionIndustryGDP Purchasers'PricesGDP

• Duetothechangeofthebaseyear

conductedbyTurkStat,thereare differencesinthedatafor2015and2016.

2016 862,56Billion USD 10.807USDper Person 3

2.45 6.97 6.36 5.61 9.94 16.37 6.16 7.4 8.17 8.85 8.53 11.87 2 4 6 8 10 12 14 16 18 2012 2013 2014 2015 2016 APRIL'17 ProducerPriceRate ConsumerPriceRate

• 4

11.9 9.8 10.1 9.7 9.9 10.8 11.8 13 2 4 6 8 10 12 14 2010 2011 2012 2013 2014 2015 2016 JAN'17 Unemployment

• 5

• 6

1.79 1.90 2.19 2.73 3.03 3.57 2.30 2.53 2.91 3.02 3.35 3.92 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 4.20 2012 2013 2014 2015 2016 TODAY

TLUSD TLEURO

• 7

MACHINETOOLSINDUSTRY GENERALOUTLOOK 2016andFirstQuarter of2017

8

USD(Million) 2015 2016 Production 738,8 664,9

ExchangeRatio %

10%

Export 470,1 442,0

ExchangeRatio %

5,99%

Import 1.024,9 1.039,3

ExchangeRatio %

+1,41%

Consumption 1.293,5 1.262,2

ExchangeRatio %

2,42%

• 9

USD(Million) 2016– Q1 2017– Q1 Export 103,05 101,46 ExchangeRatio % 1,5% Import 238,02 194,26 ExchangeRatio % 18,3%

• 10
• ***Sinceitisonlymachinetoolsformetalworkingthathadbeenanalyzed,someoftheHSCodes

wereexcluded. Country 2015(USD) 2016(USD) Change Ratio (%) Germany 218.183.218 243.892.376 11,78% Taiwan 207.506.351 174.817.023 15,75% Italy 98.258.630 126.008.150 28,24% Japan 123.063.493 115.037.283 6,52% China 77.136.451 63.081.058 18,22% SouthKorea 55.110.419 51.870.171 5,88% Switzerland 56.375.217 36.290.888 35,63% USA 23.163.868 25.894.529 11,79% Spain 18.656.110 24.171.980 29,57% FreeZones 9.607.038 10.992.602 14,42% France 13.922.778 8.636.289 37,97%

11

• MillionUSD

2016 Q1 2017 Q1 Change Ratio (%) Germany 59,40 43,80 26,26% Taiwan 47,51 36,51 23,15% Italy 34,05 17,25 49,34% Japan 28,87 28,58 1,00% China 15,30 15,58 1,83% SouthKorea 9,35 10,44 11,66% Switzerland 5,23 8,90 70,17% USA 6,70 6,41 4,33% Spain 3,53 3,10 12,18% France 3,21 3,37 4,98%

• 12

• Country

2015 2016 Change Ratio (%) USA 27.871.831 35.964.121 29,03% Germany 32.123.738 30.850.232 3,96% SaudiArabia 31.880.048 20.347.269 36,18% Canada 13.437.951 17.015.063 26,62% Poland 18.751.531 13.310.711 29,02% Russia 18.538.800 12.970.689 30,03% Algeria 12.524.792 10.223.011 18,38% Iran 13.449.474 9.788.748 27,22% England 11.095.026 8.920.887 19,60% FreeZones 10.305.197 7.542.992 26,80% CzechRepublic 12.974.633 5.500.709 57,60%

• ***Sinceitisonlymachinetoolsformetalworkingthathadbeenanalyzed,someoftheHSCodes

wereexcluded.

13

• Country

2016 Q1 2017 Q1 Change Ratio (%) USA 10,66 10,46 1,88% Germany 8,32 6,74 18,99% SaudiArabia 5,80 3,05 47,41% Canada 3,67 2,59 29,43% Poland 3,76 4,14 10,11% Russia 2,11 5,18 145,50% Algeria 1,80 4,18 132,22% Iran 3,25 2,77 14,77% England 1,89 2,00 5,82% UAE 1,51 1,89 25,17% CzechRepublic 1,18 1,00 15,25%

• ***Sinceitisonlymachinetoolsformetalworkingthathadbeenanalyzed,someoftheHSCodes

wereexcluded.

14

• CUTTINGTOOLS(2015vs 2016)

2015 (MillionUSD) 2016 (MillionUSD) Change Ratio (%) EXPORT 27,23 21,39 21,45% IMPORT 100,52 93,83 6,66%

820740109000, 820750100000, 820750500000, 820750600000, 820750700000, 820760100000, 820760300019, 820760700019, 820770100000, 820770310012, 820770310019, 820780110000, 820780190011, 820780190019, 820780900012, 820780900013, 820790100000, 820790500000, 820790710000, 820790910000, 820900200000

CUTTINGTOOLS(2016Q1vs 2017Q1)

2016 – Q1 (MillionUSD) 2017– Q1 (MillionUSD) Change Ratio (%) EXPORT 5,10 6,00 17,65% IMPORT 25,03 22,78 8,99% 15

• HOLDINGTOOLS(2015vs 2016)

2015 (MillionUSD) 2016 (MillionUSD) Change Ratio (%) EXPORT 23,12 23,68 2,42% IMPORT 40,87 44,09 7,88%

846610200000,846610310000,846610380000,846610800000,846620200000,846620910011, 846620910019,846620980000

HOLDINGTOOLS(2016Q1vs 2017Q1)

2016 – Q1 (MillionUSD) 2017– Q1 (MillionUSD) Change Ratio (%) EXPORT 6,51 5,95 8,60% IMPORT 10,53 9,31 11,59% 16

IMPORTANTACTIVITIESin2017

NEWEXHIBITION

4– 7October 2017 Izmir/TURKEY

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