The various subsectors (starting, forming, components, tools, accessories, and machining) are experiencing minor changes that don't significantly alter the overall picture. Stable figures are the dominant trend for Spain's leading industrial association, which celebrates its 70th anniversary this year. In the words of its President, Antxon López Usoz: “As has been the case in recent years, our extensive international experience and our ability to provide solutions tailored to increasingly demanding markets are allowing us to navigate turbulent waters. The year has been very complex, with enormous uncertainties in markets that are very important to us, such as the USA, Russia, Brazil, and India. However, other markets have performed somewhat better, notably Germany, which is regaining its leading position in Europe, and Mexico, Portugal, and Italy, which have shown good results. China is recovering some of the ground lost in 2015 and is showing some signs of improved demand.”.
Exports
grew by 6.6% in 2016, reaching €1,184.7 million. Looking at the destination countries for the machinery subsector, at the end of 2016, Germany remained in first place, followed by China, Mexico, Portugal, and Italy. The next five main destinations were the USA, France, Poland, the UK, and Sweden. Germany overtook the USA for first place, with a considerable increase of 35% compared to 2015, representing 12.9% of Spanish exports. China's growth was even more significant, although still far from the figures reached in 2012 or 2014. Its market share was 11.6%. In third place was Mexico, also with very considerable growth of 67%, accounting for 9.3% of our exports. Portugal and Italy complete the list of the top five countries, each representing 8% of exports, and both showing growth exceeding 30% compared to 2015 figures. Exports to these five countries account for over 50% of total exports. However, other markets experienced a decline in 2016, such as the USA, which fell from 12.6% of exports in 2015 to 8% in 2016; the United Kingdom, whose share dropped from 6.3% to 2.9%; and Russia and Brazil, which also saw decreases.
Domestic Market:
After three years of clear recovery and very high relative growth, domestic consumption stagnated in 2016, settling at €584 million, a figure clearly insufficient for a country with an industrial focus. This figure, despite doubling the amounts recorded during the worst of the recession, is still significantly lower (around 40%) than the consumption levels Spain registered before the recession. The President of AFM comments: “While it is true that industry has regained some dynamism over the last three years, it is equally true that machine tool consumption is strikingly low for a country the size of Spain, which needs to regenerate its production model. An advanced, intelligent, and digitized industry that does not invest in manufacturing technology is inconceivable. Current investment levels are clearly lower than the depreciation rate of the existing equipment, and we fear that we are witnessing industrial decapitalization in some areas of the country.” He adds: “Machine tool consumption is a clear indicator of industrial competitiveness, and given the figures, Spain needs a decisive boost to investment in production equipment with a multiplier effect. It is absolutely urgent that national Renove plans be enabled, similar to those implemented by administrations such as the Basque Country, and accompanied by decisive tax measures like those adopted by other countries such as Italy, which prioritize the reinvestment of profits in production equipment.”
Orders:
2016 saw significant growth in machine orders, exceeding 22%. This unusual figure is driven by substantial investment in the automotive sector, which has boosted major press manufacturers and the metal forming subsector in general. This situation has resulted in the largest order growth (+56%) and the highest order intake ever recorded by the subsector. However, the start of the year has been challenging in many of its main markets, registering a 4.7% drop in order intake for 2016. 2017 has begun similarly to 2016 in terms of order intake, and although it is still too early to make predictions, it will be very difficult to match the overall order intake recorded last year, making a decrease a reasonable expectation.
2017 Forecast:
The outlook for 2017 is optimistic. AFM Director Xabier Ortueta predicts a year of revenue growth: “We anticipate revenue growth of between 8% and 10% in 2017, taking advantage of the boost in new business in the metal forming subsector. We also expect similar growth in exports.” Regarding the market situation, he states, “We have observed that the start of the year points to a generally better situation, particularly in key markets such as Germany and China, where business expectations indicators have clearly improved. Although significant uncertainties remain, we anticipate a year with increasing opportunities across various markets and sectors. We hope to confirm these positive predictions by the end of the year.”
More Companies, a Stronger Cluster.
In the year that AFM celebrates its 70th anniversary, the Advanced Manufacturing Cluster is a reality thanks to the incorporation of ESKUIN (Hardware and Industrial Supply Cluster), the creation of ADDIMAT (Spanish Association of Additive Manufacturing and 3D Technologies), and more recently, AFMEC (Spanish Association of Machining and Metalworking Transformation). The AFM Cluster has become the meeting point to leverage and unleash the opportunities of a sector that is complementary and stronger when working collaboratively. “We have grown from 85 companies to more than 370 entities in just over five years. All of this has been achieved through consensus, with a commitment to collaboration and a willingness to cooperate to become more competitive. In addition to machine tools, their components, and tools, we have expanded to include additive manufacturing and 3D printing, hand tools and industrial supplies, and the world of machining and metalworking. We are the representatives of advanced manufacturing in Spain, and as such, we have taken on the mission of leading its collective strategy and defending the interests of our member companies,” asserts López Usoz.
