Market Outlook 2012 based materials industry were the strongest performers in South America and Southeast Asia. Europe including Russia and Turkey is by far the largest export market for German woodworking machinery (57 percent) followed by Asia (27 percent) and America (14 percent). Exports are now evenly split between North and South America (seven percent each). It is interesting to note that 58 percent of all exports now go to emerging markets compared to only 42 percent which go to the industrialised nations and developed markets. This trend has accelerated in recent years. Looking at the country breakdown, China was still by far the largest export market for German woodworking machinery in 2011. At €169 million, it is well ahead of the countries which come second and third in ranking, namely Russia (€120 million) and Turkey (€114 million). The US market was surprisingly bouyant (+42 percent). Whether this is an initial indication that furniture production is being repatriated from Asia, something which the Boston Consulting Group expects to happen starting in 2015, remains to be seen. Demand in Switzerland is also strong. The favourable exchange rate is working to the advantage of German manufacturers. China, Russia and France were the largest export markets for companies which supply machinery for the secondary manufacturing sector that includes the furniture and construction materials industries.
Upswing In Southeast Asia There was a surge in demand for German woodworking machinery from the ASEAN countries during 2011. A number of large projects pushed the volume of exports to the region
above the €100 million mark during the first three quarters, a 71 percent increase. Roughly 80 percent of German exports are destined for the wood-based materials industry. Half of these deliveries went to Thailand (€50 million). Vietnam was next on the list with €41 million euros. In contrast, German exports for the downstream manufacturing industry are down so far this year. It is important to keep in mind however that German manufacturers in this segment service the region primarily from their manufacturing base in China. These deliveries do not appear in German export statistics. The high level of machinery deliveries will not be sustainable in 2012. However, German manufacturers are hoping to increase sales in the secondary manufacturing market. Expansion of panel production capacity should stimulate demand in downstream manufacturing. That is a very realistic possibility, because a sharp increase in costs in the Chinese furniture industry has significantly improved the competitiveness of the ASEAN countries.
Outlook For 2012 The effects which the debt and banking crisis in Europe and North America will have on the industry remain an unknown. These external factors are currently overlaid on normal cyclical demand fluctuations. From today’s vantage point, the overall situation in the industry should remain positive over the coming months. Companies in the project business with its characteristically long execution cycles have an order backlog which will carry them well into next year. It is harder to predict how suppliers of standard machinery will fare. Looking at the geographic breakdown, demand in the German-speaking region should remain robust. Eastern Europe and Russia will also make a contribution to good business performance over the coming year. How the markets will evolve in Western and Southern Europe looks less certain. In addition, signs of a slowdown are already evident in Asia and South America. Growth remains a possibility, albeit at a more moderate rate than in recent years. Many market players are working on the assumption that investment in some segments of the market over the past two years has significantly outstripped demand. The companies are well prepared for the eventuality of a worldwide economic slowdown. They have all learned lessons from 2008 and have adapted their business plans, so that they will be able to react faster to volatility which is part of life in the industry. Overall, 2012 is expected to be a difficult year, but on the whole the industry should continue FDM to make progress. ENQUIRY NO. 1003
www.fdmasia.com | FDM ASIA Jan/feb 2012
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