Machine-tool production in Europe grew by 6% in 2012 to reach a total of 22.2bn Euros�and is expected to expand again slightly this year to reach 22.5bn Euros, according to the latest figures from the sector’s trade body, Cecimo. Most of the 2012 growth came from exports with some manufacturers, especially in southern Europe, now relying entirely on exports.

While machine-tool exports hit a record figure of 18.8bn Euros last year �– 9% higher than the previous record, set in 2008 – domestic European machine tool sales fell by about 2%.

Cecimo is worried that the continuing difficulty of finding credit is placing the European machine-tool sector “under high pressure”. It adds that the sluggish consumption in Europe is “a worrying trend” for European machine-tool builders, and points out that exports generally entail higher costs for manufacturers, so over-dependence on exports puts pressure on profit margins.

"A dull domestic market leads, moreover, to the rupture of vital links between suppliers and their traditional customers, disrupting the innovation cycle,” adds Cecimo president, Martin Kapp. “Innovation in the machine-tool industry thrives in a strong eco-system in which producers interact closely with customers. SMEs who are the major drivers of innovation, and who rely heavily on the European market, are particularly affected.” Restoring growth in domestic consumption will be vital to ensuring that Europe continues to innovate, he believes.

Cecimo has welcomed the European Commission’s focus on the production equipment industry in its latest statement on industrial policy. The Commission has identified advanced manufacturing technologies for clean production as being one of six priority areas that, it believes, will drive growth in Europe.