VDMA Thermo Process Technology: Germany increases market share, with decline in world trade

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Sales of the German Thermo Process Technology industry were down slightly for the second year in succession (minus 2 percent) in 2016. Especially on markets outside the EU, sales fell. In contrast, there was a rise of 9 percent in sales to customers from the Eurozone and sales to customers in Germany were up by 16 percent compared with the previous year. On the other hand, fewer orders were received from the euro countries and Germany in 2016, resulting in an average overall fall of 13 percent in orders received from all the regions. Production of industrial furnaces, burners and firing systems in Germany only rose slightly (plus 1 percent).

Improved business climate – moderate growth in sales expected in 2017

The business climate, which had deteriorated significantly in the course of 2016, became considerably brighter in the first four months of this year. The ifo business confidence index for the responder group “industrial furnaces and burners” had risen still further from the positive value recorded at the end of 2015/beginning of 2016 by April 2017. Since the autumn of last year, this index has once again followed the general trend in the overall machinery index. “Compared with the prior-year period, the development in orders received and sales in the first quarter of 2017 indicates an improved situation in the thermo process equipment sector in Germany. Over this period, both indexes improved by about one third,” said Dr. Timo Würz, Managing Director of the VDMA Thermo Process Technology specialist association. “Participants in the latest economic situation survey held by the specialist association consider that moderate growth in sales will also be possible in the current year. On average, they expect growth of about four percent,” Würz added.

World market shrinks in 2016

In 2016 as a whole, world trade in thermo process equipment fell by 11 percent to a volume of slightly less than €8.5 billion. The five largest delivery countries – Germany, China, Italy, the USA and Japan – all experienced declines in exports. Exports from China dropped by 12 percent to €1.3 billion and deliveries from Germany were down by 2 percent to an export volume of slightly less than €1.3 billion. Germany therefore remained the world market leader and was able to increase its market share to 19 percent.

Growing exports from Germany to Central, South and South-East Asia

In 2016, the EU 28 countries accounted for more than a third (36 percent) of deliveries, although growth was relatively low compared with the previous year, at 2 percent. Once again, there was a decline in deliveries to the other European markets (minus 21 percent), especially Russia and Turkey (at minus 38 / minus 23 percent). There were positive developments in deliveries to Central and South Asia as well as South-East Asia (plus 73 / plus 21 percent). In these regions, the greatest increases in exports were recorded in markets such as India (plus 38 percent), Uzbekistan (plus 331 percent), Indonesia (plus 215 percent), Malaysia (plus 25 percent) and Thailand (plus 13 percent).

Contrary trends in deliveries to China and the USA

Exports to the USA rose for the third year in succession (plus 16 percent), making the USA the second-largest customer for thermo process equipment from Germany. Deliveries to China, still the largest customer country, fell for the second year in succession (minus 27 percent). In 2015, the shares of China and the USA in German exports had been 16 and 9 percent respectively in 2016, the shares of the respective delivery volumes approached each other, at 12 and 11 percent.

Source: VDMA

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