Düsseldorf, Germany — Economic uncertainty and unresolved global issues are dragging down market volumes in the injection molding industry worldwide, Engel executives said.
During an Oct. 16 news conference on the first day of K, the Austrian injection molding machinery maker said the impact of punitive tariffs and sanctions, a continuing lack of Brexit clarity, and an ongoing debate concerning regulatory tariffs and diesel driving bans as the biggest drivers leading both consumers and business decision-makers to delay purchases and investments.
"The declines are drastic and noticeable worldwide," said Christoph Steger, chief sales officer of Engel Holding GmbH.
Steger said the company is seeing an inconsistent picture across industries. Technical molding, the company's second-largest contributor to sales, is "on budget," he said, and the company is experiencing continued growth in medical technology.
But the automotive industry — the largest of Engel's five business units — has been the hardest hit.
"There is, within the [plastics machinery] industry, a significant decline in the automotive industry," Steger said, pointing to the monthlong United Auto Workers strike in the United States that has cost General Motors Co. millions of dollars a day from lost production. The union and GM anounced a tentative settlement Oct. 16.
Engel's recent report of a global decline, especially in automotive, echoes what the Austrian company had previously warned of earlier this year in an annual earnings report.
Globally, all regions are hurting from a slowdown in the automotive industry, but China and German-speaking countries in Europe have been especially impacted. Those two regions contributed the largest share of Engel's 6 percent sales growth for the 2018-19 fiscal year that ended March 31. Sales for that fiscal year were 1.6 billion euros.
Steger said the uncertainty of global issues, mainly political, are making forecasting for the year "very difficult," but for the company's current 2019-20 fiscal year, he is anticipating significantly lower sales.
Sales for the current year is projected to decline by 19 percent to 1.3 billion euros.