indUStrY indicator report - Grundfosmachining.grundfos.com/media/64724/monthly industry... · GRUNDFOS MACHINING INDUSTRY issue 2, 2012 Update on the economic SitUation and development

GRUNDFOS MACHINING INDUSTRY

issue 2, 2012

Update on the economic SitUation and development in Selected SectorS

indUStrY indicator report

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contentSFig. 1, Economic Expectations for Key Countries and Industry Sectors(Source: ZEW indicator, ZEW, 14 February 2012)

Fig. 2, New Passenger Car Registrations in Europe (Source: ACEA, 16 February 2012)

Fig. 3, Machine Tool Order Intake in Germany(Source: VDMA, March 2012)

Fig. 4, Machine Tool Order Intake in Japan(Source: JMTBA, March 2012)

Fig. 5, Machine Tool Order Intake in U.S.A.(Source: AMT, 13 February 2012)

Fig 6, German Business Climate – Industry and Trade(Source: Business Climate Indicator, Ifo Institute, 23 February 2012)

Fig 7, The Grundfos Global Automotive Indicators(Source: Automotive Information Platform, MarkLines.com, March 2012)

Fig 8, The Grundfos Raw Material Price Index(Source: London Metal Exchange, Steel Business Briefing, CME Group, February 2012)

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This quarterly newsletter can give you a gen-eral 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 new 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 Ger-many, 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 au-tomotive Monthly Production Output by country and manufacturer. We build the latter up from available automotive produc-tion figures. Grundfos Machining Industry segment uses automotive production statis-tics, 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 see-ing where the market is going. So please: read these statistics and comments as indi-cators alone.

We publish a full version of the Grundfos Industry Indicators quarterly in three lan-guages, as well a monthly version in English only.

The Grundfos Industry Indicators Copyright 2012 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 di-rectly with the links provided. We welcome your other comments.

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Grundfos analyst: Good Times For the Machining Industry

Economic Expectations for Key Countries and Industry Sectors

Most indicators on general business expectations currently express optimism, based on positive developments in the U.S. and continued growth in Asia. In Europe, the German econo-my stands strong.

The automotive industry in all major producing countries gained momentum during the last year, including Japan, which is back on track again.

The machine tool industry is also doing very well in the U.S., Germany and Japan, although we can see a slight weakening of order intake in January.

All in all these are good times for the machining industry for the time being

Frank BaakeSenior Marketing Analyst

The Centre for european economic Research (ZeW) writes, “The ZeW indicator of economic sentiment for Germany has increased by 27.0 points to a level of 5.4 points in February 2012. The indicator thus reaches positive territory for the first time since May 2011. A higher value was last seen in April 2011.

“The further increase of economic sentiment in-dicates that the recent slowdown in economic growth is not likely to last in the view of the sur-veyed financial market experts. Positive econom-ic data from the united states nourish hope for a more stable global business climate. Moreover, the progress in the negotiations of the Greek government with its creditors may have reduced economic uncertainty in the euro zone.

“economic expectations for the euro zone have increased by 24.4 points in February. The respec-tive indicator now stands at minus 8.1 points.”

The ZEW Indicator of Economic Sentiment is as-certained 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 pes-simistic 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.

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ZeW indicator of economic sentiment (Germany)

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The VDMA (Verband Deutscher Maschinen- und Anlagen-bau - German Engineering Federation) is a network of around 3,000 engineering industry companies in Europe.

For more information, please visit the VDMA’s website at vdma.org.

New Passenger Car Registrations in Europe

Machine Tool Order Intake in Germany

The european Automo-bile Manufacturers Asso-ciation writes: “in Janu-ary, demand for new cars dropped by 7.1% in the eu, compared to the same month a year earlier.

in total, 968,769 new reg-istrations were recorded in the region, with on aver-age one more working day than in January 2011.

Registrations varied per market: France (-20.7%) and italy (-16.9%) recorded a double-digit downturn, while spain posted a 2.5% growth. The German (-0.4%) and British (-0.0%) markets remained stable. The biggest contraction was noted in Portugal

(-47.4%) and the largest increase in Ro-mania (+86.4%).”

For more information, see ACEA’s web-site at acea.be.

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Machine Tool Order Intake in Japan

According to the Japan Machine Tool Builders’ Association (JMTBA), the order intake for the Japanese machine tool In-dustry in January 2012 was -5.8%, compared to December 2011. Compared to January last year, the order intake is -6.6%.

For more information, please visit the JMTBA’s website at jmtba.or.jp

Machine Tool Order Intake in U.S.A.

The Association for Manufacturing Technology (AMT) writes, “December U.S. manufacturing technology orders totalled $519.98 million according to AMT and AMTDA, the American Machine Tool Distributors’ Association. This total, as reported by companies participating in the USMTO program, was up 12.2% from November and up 12.7% when compared with the total of $461.48 million reported for December 2010.

With a year-to-date total of $5,508.81 million, 2011 was up 66.4% compared with 2010.”

The United States Manufacturing Technology Consumption (USMTC) report, jointly compiled by the two trade associa-tions representing the production and distribution of manu-facturing technology, provides regional and national U.S. con-sumption 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.

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“The Ifo Business Climate for trade and industry in Germany improved in Feb-ruary. Companies expressed greater optimism about their business expec-tations for the fourth time in succes-sion. The German economy is currently supported by domestic demand.”

The Ifo Business Climate Index is based on ca. 7,000 monthly survey responses of firms in manufacturing, construc-tion, wholesaling and retailing. The firms are asked to give their assess-ments of the current business situa-tion 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 fa-vourable”, “unchanged” or “more unfa-vourable”. The balance value of the cur-rent 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 trans-formed balances are all normalised to the average of the year 2000..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.

Ifo Business Climate Germany:

German Business Climate – Industry and Trade6

Data source: MarkLines Co. Ltd

Data source: MarkLines Co. Ltd

The Grundfos Global Automotive Indicators

Most actual reliable data are available from December 2011, where the usual drop in production numbers could be observed, but in average still slightly above numbers from previous year.

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The Grundfos Raw Materials Price Index

Raw Materials Update

Source: London Metal Exchange, Steel Business Briefing, CME Group.

Grundfos Cost Analyst Jesper Bjer-regård Juul comments on the price fluctuations of raw materials and their impact on the manufacturing industry. He writes:

• “Thefirstthreemonthsof2012haveshowed price increases for most commodities. One possible explana-tion is the decision of the u.s. Federal Reserve to maintain the record low interest rates until 2014 as a mini-mum.

• Commodity prices have for sometime been pushed downward by the fears of a global recession, with the debt-crisis in europe, slow growth in the u.s. and a weakening growth in China caused by high inflation, fiscal tightening and falling house prices.

•Different events have reduced thefear of global recession. The euro Group has reached an agreement on the second rescue plan for Greece. Moreover, we have seen more posi-tive signs from the Chinese PMi, the

German iFO [see table 6 above] and the u.s. housing- and automobile markets. All of these give a picture of a strengthening global economy.

• AccordingtotheeconomistsatDan-ske Bank – the largest bank in Den-mark – the commodity market is priced for an overly negative global outlook, which makes room for an upside in commodity prices in the fu-ture.”

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Source: London Metal Exchange, Steel Business Briefing, CME Group.

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