Although 2022 closed with a price-adjusted increase in turnover of 10 percent—in nominal terms, 18 percent—for German plastics and rubber machinery manufacturers, the outlook is subdued according to the latest report from the Plastics and Rubber Machinery Association at the VDMA.
Currently, the order books are still reasonably full, suggesting that 2023 may become a comparatively good sales year, but expectations regarding for 2024 onward are guarded.
“We lost new orders last year, with a price-adjusted minus of 13 percent, and in the first quarter of 2023 even more significantly at minus 33 percent," said Thorsten Kuhmann, managing director of the Plastics and Rubber Machinery Trade Association. "That probably means fewer orders on the books that can be processed and converted into sales in 2024."
Demand is unlikely to pick up in the short term, according to the association. The combination of low growth, high inflation and high interest rates that characterizes the economic climate across the globe is disheartening investors.
While plastics and rubber machinery manufacturers stand to benefit from the U.S. Inflation Reduction Act and the economic stimulus package it provides, whether or not this can reignite the global economy is far from certain. The association sees growth opportunities for the sector mainly in the packaging and e-mobility spaces, with China leading the way. In China, the vehicle electrification trend is advancing at an enormous pace; the rising global population is also increasing the demand for packaged food.
Adverse economic conditions notwithstanding, the industry must also continue to pursue the transformation process toward a circular economy, confronting the twin challenges of decarbonization and defossilization. The task is a tremendous one—reducing carbon emissions or even establishing carbon-neutral production requires investment and restructuring. It is also one that is not made easier by the current uncertainties surrounding the supply and costs of energy experienced by many companies and customer groups.