Slump in Orders hits Textile Machinery Market
Within a period of less than 10 months, German textile machinery manufacturing has experienced a slump in orders that nobody would have expected recently. For the time from January to July 2008 a decline in orders of a total of 42 percent was reported against last year. For spinning machines this decline amounted to even 51 percent. Due to this tough situation in new orders a number of plants had to take painful steps such as cutting jobs cuts and working short-time. “The textile machinery business has always been cyclical in nature. The latest developments in this industry, however, are representing the worst fall since World War II,” Fritz P. Mayer, Chairman of the VDMA association of textile machines and Managing Partner of Karl Mayer Textilmaschinenfabrik GmbH, Obertshausen, explained.
According to the association there are absolutely no signs for a trend reversal in the near future. The insecurity on the financial markets on the one hand, and textile industry’s global dependence on government subsidies on the other hand, make it hard to give a well-founded forecast. The trade association textile machinery has had to revise its sales forecast radically downward to minus 25 percent.
Its 95 percent share in exports makes the German textile machinery industry to one of the most export-oriented machine building industries. In 2007 this industry exported machines and equipment to the amount of 3.8 billion euros, the most successful year in this decade. As a result, the bar for exports was raised.
From January to July, total exports started to decrease by 12 percent compared to last year’s period. This rather moderate decline can be attributed to the processing of orders dating back to the previous year. However, the extremely drastic slump relating to important volume markets like Turkey (minus 46 percent) and India (minus 23 percent) show the effect of a lack of orders on manufacturing and delivery.
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