Is Europe on the verge of a financial meltdown that could break up the euro? Or is the industrial economy running flat out, especially in Germany? Those questions spell out the major disconnect that permeated the Fakuma trade show in Germany last month: The booming business of plastics machinery makers is in direct contrast to the dire headlines in the popular press.
Fakuma 2011 drew 44,823 visitors to Friedrichshafen on Lake Constance, where Germany, Switzerland and Austria come together.
The pan-European setting was appropriate, given the eurozone worry over the potential default of Greece — and other debt-fueled fears about Portugal, Spain, Italy and even France. Some media reports even speculated that the euro could fail, potentially causing economic devastation.
At Messe Friedrichshafen, newspapers in the food court shouted out the grim headlines. Fakuma attendees walked right on past — to buy a machine, make a capital investment in the future. Several companies held news conferences to report record sales, including KraussMaffei Technologies GmbH, Engel Holding GmbH and Billion SA.
The Greek bailout threatens to flounder along in slow motion. Injection press executives don't know exactly what will happen. But at Fakuma, they said uncertainty about the eurozone does not seem to be affecting the real economy of plastics machinery.
“I would say no, at least not in Germany,” said Helmut Heinson, managing director of Arburg GmbH + Co. KG. “But we have to look at it individually from country to country.”
Heinson wonders about a possible credit crunch, depending on how the European Union solves the debt problems of some countries. It depends on the banks. “If the banks do not offer any loans to their customers, they don't have money to invest,” he said.
The Great Recession was born in the USA. But it really doesn't matter, since the world economy is so interconnected. Tetsuya Okamura, CEO of Sumitomo Demag Plastics Machinery GmbH, found that out when he went to Sumitomo Heavy Industries Ltd. in Tokyo for meetings before Fakuma. “They are much more concerned with how the European economy's changing,” he said.
Christian Renners, Sumitomo Demag's general manager of sales, thinks the “euro crisis” is overblown. “There [are] always ups and downs, and have been in the machinery business. So it's not an unusual thing to see,” he said.
There's a lot of truth to that. Fakuma 2011 was a continuation of the K 2010 show in Düsseldorf — major European press makers can't build them fast enough. Driven by pent-up demand, the capital equipment market snapped back from the dismal downturn of 2008 and 2009. So any slowing now could be a return to more-normal business, and not a reflection of European anxieties. The big European press makers are global, which balances out any regional weakness.
With full order books right now, the first part of 2012 looks good to them. That was the word from the shores of Lake Constance, as the majestic Zeppelin airships floated overhead.