German plastics and rubber machinery manufacturers had already seen sales drop 6 percent in 2019, after 11 years of growth. Now the trade group VDMA says the impact of the coronavirus has led to an even bigger hit.
Orders for the first five months of 2020 were down 20 percent compared to the previous year, the trade group said.
"The pandemic was the stab in the back for customer industries that had already been performing badly," said Thorsten Kühmann, managing director of the VDMA trade association. On a more positive note, he noted that "in times of the coronavirus crisis many plastics and rubber machines are being supplied particularly to the sectors of medical engineering and packaging."
The pandemic has had another effect, as well: It has served to show that plastics can have benefits, especially where hygiene is concerned, leading to what Kühmann described as "a noticeable image improvement in society. However, we are aware that we are currently undergoing an exceptional situation and the shift in image will not have a long-term impact," he said.
Exports to China and to the U.S. declined 3 percent due to the coronavirus crisis. While the Chinese market is starting to show signs of revival, the decline in exports to the U.S. is only the beginning, VDMA warned.
Exports to the countries of Europe have likewise been impacted by the pandemic. Particularly steep drops were seen in the volume of machinery exported to Italy, which was down 31 percent, sales to France dropped 42 percent and sales to Spain was down 48 percent.
Exports to India plummeted by 73 percent.
On the other hand, imports of plastics and rubber machinery from Germany by both Russia and Turkey rose, compared to the same period last year, with exports to Russia up 28 percent and sales to Turkey up by 102 percent.
The future, however, is rife with uncertainty, the group said. The pandemic, combined with the somber outlook for the automotive industry and the uneasy trade relations between the U.S. and China, are all factors that weigh negatively on the export-oriented engineering sector.
In addition, the effect of the plastic tax recently adopted by the European Commission remains to be seen. overall, the majority of manufacturers of plastics and rubber machinery are predicting a decline in sales of up to 30 percent in 2020.
Yet not all is doom and gloom: the recovery plan drafted by the European Union sends a strong signal that collective action will be taken to address the economic impacts of the coronavirus pandemic.
In addition, a clear 80 percent majority of German plastics and rubber machinery manufacturers expect a return to the sales volumes of 2019 by 2022, at the latest, with some looking for this to happen as early as next year. Incoming orders from western Europe and China are expected to rise in the second half of 2020, which will mark the first indications of a turnaround.