The machinery market in Europe is set to contract in the coming years, by as much as 10 percent, according to an industry expert.
Cesar Rodriguez Gabilondo, the CEO and founder of MachinePoint Consultants, has warned that a combination of excessive production capacity and the slow demand for plastic products will likely lead to a “10 percent correction” in the general machinery industry in Europe, triggering a decline in prices and lower demand.
“I may be wrong, but I expect that the 2019-20 crisis for the machinery industry will be triggered by a 2-3 percent demand contraction of industrial products after materializing any combination of global risks,” Rodriguez said.
The risks could include trade wars, a no-deal Brexit, Italian euro crisis, the immigration crisis, a slump in emerging markets such as Turkey or higher oil prices, fueled by sanctions on Iran, he said.
“In the last eight years machinery production has grown 26 percent compared with 6 percent of non-durable manufactured goods in Europe,” noted Rodriguez, adding that orders placed at the end of 2017 and during the first half of 2018 will also join the grid to “a tremendous world-wide capacity in production increase.”