German polymer machinery segment reports strong 2023, but orders slump

Dresden, Germany – The German plastics & rubber machinery industry has closed 2023 with a strong improvement in year-on-year sales, helped by backlog of orders placed previously.

Sales for 2023 increase 22% year-on-year ‘not price-adjusted’, and 13% price-adjusted, VDMA confirmed to ERJ, without giving a figure.

Orders for the year were, however, down 16% year-on-year ‘not price-adjusted’ and 22% adjusted for prices, VDMA added.

In terms of production, output was up 3.4% year-on-year at €8.8 billion, with a utilisation rate of 86%, down from 93% reported in 2022.

On a global scale, Germany contributed to just under 21% of production worldwide, which stood at €42.5 billion, after China with a production value of €31 billion.

Commenting on the results during an 5 June conference, chairman of the VDMA plastics and rubber machinery association Ulrich Reifenhauser said the growth in sales was “pleasing”.

Manufacturers, he said, have been able to bring in many orders in recent years, which have now been filled.

However, Reifenhauser said “the signs have changed significantly worldwide,” referring to a decline in orders.

“Most companies have worked through their order backlog and are currently facing up to the issue of underutilisation," he explained.

In addition to the wars in Ukraine and the Middle East, high energy costs, inflation and high interest rates are weighing on manufacturers, resulting in uncertainty and higher overheads, he added.

Also speaking at the event, Thorsten Kuehmann, managing director of the plastics and rubber machinery association said the “downward trend” in new orders had not stopped, despite a general economic recovery.

"After we already had to cope with a price-adjusted decline of 13% in 2022, we recorded another 22% fewer orders on the books last year,” Kuehmann said.

As a result, the industry veteran said many companies have been forced to take countermeasures by introducing reduced working hours.

On the sales side, the current year remains challenging, due to a lack of new orders.

New orders between January and March fell 17% year-on-year, with the German domestic market seeing a 40% drop compared to the first quarter of last year.

But VDMA expects a ‘pick-up’ from summer onwards as some uncertainties are addressed and interest rates are stabilised “at a more tolerable level.”

Overall, the association expects industry turnover to decline up to 5% year-on-year or at a best-case scenario remain flat n 2024.