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VDMA Press Conference Drop in Orders for Plant Engineering – Developing Countries Take the Lead

Editor: Dominik Stephan

Fallen on hard times: After an optimistic start in 2012, Germany's plant engineering industry faced a significant drop in orders in late 2012. Now Europe hopes to take a slice of the action of the US shale gas boom...

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Steel, foundries and rollers are affected by declining steel consumption
Steel, foundries and rollers are affected by declining steel consumption
(Bild und Quelle: VDMA)

Frankfurt/Germany – “Technology competence is a major advantage of German plant engineering," stated Helmut Knauthe, speaker of the Large Industrial Plant Manufacturer’s Group (AGAB) and member of the Executive Board at Thyssen Krupp Uhde. Allthough the industry could push its exports quota to 81% in 2012 (eight percent above the 2011 figures), the branch can not keep the level of the previous years. “Our member companies booked orders worth 20.5 billion euros in 2012, an 18% decline year-on-year (2011: 24.9 billion euros),” Knauthe stated during the release of the groups latest annual report in Frankfurt, Germany.

Developing Countries Gain Importance

Foreign new order intake totaled 16.6 billion euros compared to 18.3 billion euros in 2011. The importance of the industrialized nations in particular continued to decline during the reporting period, whereas the emerging countries in Asia, South America and Eastern Europe became a more significant factor. Five of the top ten markets for large industrial plant manufacturers in 2012 were in Asia.

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China placed orders worth 1.6 billion euros, putting it first in the rankings followed by South Korea (1.3 billion euros) and India (945 million euros). However, countries with large populations located outside of Asia including Turkey, Brazil and Russia offer very significant potential for the industry. Last year, orders worth more than half a billion euros were received from each of these countries.

"Market Break" for Domestic Business: - 41% Orders

The situation on the domestic market is quite different: With a domestic demand decline of more than 41%, not only Knauthe speaks of a "slump" and "market break". New order intake amounted to 3.9 billion euros, that is 2.7 billion Euros below the 2011 figures. There were two decisive factors behind this trend. Nominal capital investment in Germany fell by more than 6%, affecting orders in the large industrial plant manufacturing sector as well. Also, an unfavorable energy policy framework resulted in a lack of essential investment in fossil power stations.

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