Orders for German plastics and rubber machinery plummeted 27 percent in the first quarter of 2022 compared to the prior year while overall sales were up 3 percent. High demand from the packaging and medical sectors fueled demand in 2021 so the drop was somewhat of a base effect.
However, other factors have made it difficult for machine and equipment builders to process the orders and convert them to sales, according to officials of the mechanical engineering industry association Verband Deutscher Maschinen- und Anlagenbau (VDMA), which is based in Frankfurt, Germany.
"First and foremost, there is the poor availability of materials," VDMA Plastics & Rubber Machinery Managing Director Thorsten Kühmann said in a news release.
The war in Ukraine and China's strict zero-COVID policy also have contributed to logistics problems and greater uncertainty in the market, which are having a negative effect on business.
As a result, the trade association is scaling back its original forecast that projected growth of 5-10 percent, saying it's no longer realistic for 2022.
"Due to the ongoing developments on the procurement market, we only expect a sideways movement or, in the best case, a slight increase in turnover for 2022 — despite full order books. We expect a development of 0-2 percent," Kühmann said of the new outlook.
With more than 200 members, VDMA is the largest organization for mechanical engineering in Germany and Europe, particularly Austria, Switzerland and France.
VDMA says German member companies represent sales of about 7 billion euros ($7.4 billion) in core machinery and 10 billion euros ($10.5 billion) including peripheral technology.
Every fourth plastics machine manufactured worldwide comes from Germany in terms of value, according to VDMA.
Meanwhile, the Italian machinery sector released results last week from the latest member survey that shows a 14 percent growth in production for the year 2021, with value exceeding pre-pandemic levels.
For the first quarter of 2022, Amaplast reported a 28 percent year-over-year increase in demand, particularly in overseas markets.
Amaplast's outlook for the second quarter also shows optimism with incoming orders expected to grow by another 6-7 percent.
However, Amaplast officials also said it was difficult to forecast for the coming months as there are many factors that may influence the performance of the industry. They pointed to the war in Ukraine limiting manufacturing supplies and leading to higher energy costs as well as the COVID-related closures in China, including the port of Shanghai.
"Companies thus find themselves operating in an exceedingly complicated and also paradoxical situation. In spite of the above issues, orders continue to accumulate and it may become complicated for many companies to fulfill them," Amaplast said in a news release.