CECIMO Statistical Toolbox

Transcription

1 European Association of the Machine Tool Industries Where manufacturing begins In this edition: 0 Introduction 1 Machine tool orders 1.1 CECIMO orders 1.2 Peter Meier s forecast CECIMO Statistical Toolbox December 2013 Edition 2 Macro-economic indicators in the EU & correlation with MT orders 2.1 GDP 2.2 Interest rates - Euribor 2.3 Industrial production index 2.4 Gross Fixed Capital Formation (GFCF) 2.5 Capacity utilisation in the invest. goods sector 2.6 Bank lending survey 2.7 Foreign exchange rates 2.8 Industrial employment 3 Business expectations 3.1 OECD Business Confidence Indicator for Europe 3.2 Purchasing Managers Index (PMI) CECIMO aisbl 66, avenue Louise 1050 Brussels Belgium Tel: Fax: For more information: information@cecimo.eu 4 MT-IX 5 CECIMO trade 5.1 CECIMO production 5.2 CECIMO Business Climate Barometer 6 European Commission economic forecast NB: only the highlighted indicators are available in this edition of the toolbox

2 cess of European machine tool industry. Therefore the recovery of domestic consumers gives some certainty about the future of the sector. Introduction (Glossary at the end of the document) Since the summer, European economy has been seeing a turnaround in region, albeit a tentative one at this stage. In Europe overall, growth turned positive in the second quarter of this year and this was confirmed for the third quarter, including for example in Spain and Portugal. Recovery is expected to gather strength next year and further in For long time the unemployment has been worryingly high in Europe. However the latest figures on unemployment suggest that the negative trend is turning. In October, euro zone unemployment fell for the first time since spring While surveys such as the manufacturing PMI continue to point towards positive growth in production, they have levelled off over recent months, suggesting that growth will remain modest rather than spectacular in Europe. Industrial output in the euro zone fell sharply in October, raising risk that the currency bloc s weak performance in the third quarter will continue into the final three months of the year. This all confirms that the crisis has not been ordinary cyclical downturn. Its origins lay in the large and unsustainable macroeconomic imbalances that accumulated over many years. The structural reforms starting to show results but governments still need assure genuine commitment and continuation of applied policies. European machine tool industry mimics economic trends closely. After modest beginning of the year the order intake recorded positive trend. The increase in foreign orders confirms stable growth at emerging markets. However domestic orders provide even more optimistic outlook. Still under the levels of 2005, domestic orders have increased 6% since the beginning of the year. The synergy between machine tool builders and their clients is the unique factor witch guarantees the global suc- European machine tool industry have built its success on simple principle being innovative and able to adapt and focusing on its core competences. However the good state of the sector cannot rely only on private initiative and improving economic conditions. The re-industrialisation of Europe will only be achieved when industrial competitiveness is at the heart of EU policymaking. Today European machine tool builders face several challenges. To achieve the economies of scale the sector needs smoothly working EU single market including a simplified framework for uniform and effective market surveillance in Europe, which creates a level playing field for manufacturers. Next to the internal market machine tool builders as very active exporters need a supporting European trade policy to ensure that the companies have export opportunities and market access to growing markets. To ensure global competitiveness European machine tool builders have to innovate in increasing pace. European policies can bridge the gap separating research and experimental development from manufacturing and commercialisation. Lastly, despite high unemployment rates, machine tool companies are struggling to find talent. Therefore a better match between education and training systems and our labour markets is required to fill job openings. The mix of European machine tool sector s needs is very varied and also European industrial policy should take a diversified view at the industry s needs. Creating a successful European industrial policy depends on getting the support of Europe s leaders followed by coordinated action of all member states and the EU institutions. 1.1 CECIMO orders The third quarter of 2013 orders intake increased in CECIMO countries. Index of total orders gained 2% compared to the second quarter of 2013, whereas domestic orders showed 8% and foreign orders 4% increase. The total orders index closed at 113 points, that is 4 points above the level recorded a year ago. Export activities are essential for European machine tool industry, therefore growing foreign order intake remains very good news reflecting returning foreign demand and the competitiveness of the sector. However the domestic orders provide more reason for optimism. The domestic orders index showed positive growth a third 2

3 6 Introduction quarter in the row, reaching to 94 points and increasing 16% in comparison with the same period a year ago. In a long run domestic markets, that create the base for unique synergy with the local consumers, secure the vitality of the European machine tool industry. 1.2 Peter Meier s forecast For almost a year the OECD leading indicators point upwards in Europe and the United States. And in the last two quarters also the Business Confidence Indicators turned upward. Usually industrial production follows these signals with a lag of about six months. In Europe however industrial production still remains in the trough and in the United States the (since the crisis unbroken) rising tendency seems to lose speed. Hence the recovery, which we expect for some time already, is in abeyance. In China the leading indicators don t point to an end of the stagnation phase and in Japan the situation resembles to that of Europe. Nevertheless the industry cycle in Europe will most likely gain momentum at the beginning of 2014, even though one has to expect a rather restrained upturn. In any case this will have a positive impact on the demand of investment goods. The reason for the hesitant recovery in Europe lies in the weak consumption, which remains still in the trough. At least the retail sales volume increased in summer remarkably and the consumer confidence has reached the mark of 100 after a two years plunge. It is still too early to declare this as a turning point. In my models I assume, that the consumption in Europe will remain in the bottom of the trough until mid of The Consumer Confidence Index in the United States is currently falling back again. For this reason consumption keeps relatively calm. Other than in Europe the consumption in the United States has again reached the level of 2007, but the growth rate slowed down since the beginning of In Asia the Consumer Confidence blurs as well. In Japan the consumption stagnates for years and in China the up to now robust growth rate flattens slightly. All in all the consumption in Asia will grow further and in 2014 industrial production might make the turnaround. It is also likely that in the United States consumption and industrial production will soon gain momentum. And if in addition Europe will find out of the trough, we have excellent conditions for a longer lasting recovery. This will have a positive impact on the demand for investment goods. Further positive feedbacks will gild most probably the unsolved problems of the national finances, which will become apparent again only during a next greater crisis. Business Confidence: The OECD Business Confidence Indicator for Europe ranges now clearly above index 100. This signals a rising demand of machine tools in the coming months. Also the leading indicators in the main worlds markets point in the same direction. CECIMO 8 Forecast: The CECIMO 8 average stagnated in Q on a low level. There is evidence that the demand will grow in the next quarters, but compared with the last forecast the growth rate decreased. For 2014 one can expect new orders to grow by about 10%. 2.1 GDP GDP rose by 0.1% in the euro area (EA17) and by 0.2% in the EU28 during the third quarter of 2013, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the second quarter of 2013, GDP grew by 0.3% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 0.4% in the euro area and rose by 0.1% in the EU28 in the third quarter of 2013, after -0.6% and -0.2% respectively in the previous quarter. During the third quarter of 2013, GDP in the United States grew by 0.7% compared with the previous quarter (after +0.6% in the second quarter of 2013). Compared with the same quarter of the previous year, GDP rose by 1.6% (after +1.6% in the previous quarter) in the United States. Japanese GDP grew 0.3% in the third quarter of 2013 compared with the previous quarter. On yearly basis GDP increased 2.4% in Japan. 3

4 Interest rates EURIBOR Introduction In November, the 3-month Euribor and 12-month Euribor monthly average decreased by 1 and 3 basis points respectively compared to the levels observed in October. The average 3-month Euribor recorded 0.22% and 12-month Euribor 0.51%. The trend of Euribor follows the ECB decision to lower the interest rate on the main refinancing operations of the Euro-system and the rate on the marginal lending facility by 25 basis points last month. Despite returning economic growth and increasing business confidence an adequate transmission of monetary policy to the financing conditions is still lagging in euro area countries. The fragmentation of credit markets creates very different business environment that companies face when looking for loans to invest in equipment in the Northern or Southern part of Europe. See glossary for definitions 2.3 Industrial production index In October 2013 compared with September 2013, seasonally adjusted industrial production fell by 1.1% in the euro area (EA17) and by 0.7% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In September industrial production decreased by 0.2% in the euro area and rose by 0.1% in the EU28. The production of energy fell by 4.0% in the euro area and by 2.7% in the EU28. The production of durable consumer goods decreased by 2.4% and 1.5% respectively. The production of capital goods dropped by 1.3% in the euro area and by 0.9% in the EU28. The production of intermediate goods increased by 0.4% in the euro area and by 0.5% in the EU28. Among the Member States for which data are available, industrial production fell in twelve and rose in eleven. The largest decreases were registered in Ireland (-11.6%), Malta (-7.4%), the Netherlands (-3.5%) and Sweden (-1.4%), and the 6 highest increases in Lithuania (+2.2%), Denmark (+1.8%), the Czech Republic and Romania (both +1.7%). In October 2013 compared with October 2012, industrial production increased by 0.2% in the euro area and by 0.8% in the EU28. The production of intermediate goods grew by 1.6% in the euro area and by 2.0% in the EU28. The production of capital goods rose by 1.2% and 2.1% respectively. The production of energy decreased by 3.4% and 2.9% respectively. The production of durable consumer goods fell by 5.4% in the euro area and by 4.1% in the EU28. On yearly basis, among the Member States for which data are available, industrial production rose in twelve and fell in eleven. The highest increases were registered in Romania (+10.2%), Estonia (+6.9%), Hungary (+6.1%) and the Czech Republic (+6.0%), and the largest decreases in Malta (-13.9%), Ireland (-7.5%), Sweden (-6.5%) and Greece (-5.3%). See glossary for definitions 2.5 Capacity utilisation in the investment goods sector In the fourth quarter of 2013, the utilisation of production capacity in the European Union decreased marginally 0.4 percentage points compared to the previous quarter e.g. 80.4% of industrial capacity were deployed in the last quarter of The assessments of past production, the level of overall order books and export order books improved sharply. The share of managers assessing their current production capacity as not sufficient (in view of current order books and demand expectations) increased. The figures show also a slight increase in the number of months production assured by orders on hand. See glossary for definitions 2.7 Foreign exchange rates The euro appreciated against the Japanese yen by 1.1% and hold stable exchange rate with the Swiss franc in November. Over the same period euro depreciated against the US dollar 1.0%. On 4 December 2013 the nominal effective 4

5 Introduction exchange rate of the euro, as measured against the currencies of 21 of the euro area s most important trading partners, stood at 1.6% above its level at the beginning of September and at 4.9% above the level one year earlier. Movements in exchange rates are largely related to developments in interest rate expectations, policy uncertainties outside the euro area, as well as adjustments in market expectations about the economic outlook for the euro area relative to other major economies. Taking into account the modest growth of euro area the European machine tool industry just hopes that the appreciation of euro does not erase highly welcome extra competitive power gained via low exchange rates at global markets. 3.1 OECD Business Confidence Indicator (BCI) for Europe Business Confidence Indicators (BCIs), designed to anticipate turning points in economic activity relative to trend, show signs of an improving economic outlook in most major economies. The BCIs point to economic growth above trend in Japan. In the United States, the BCI points to growth around trend. In the emerging economies, the BCIs point to growth around trend in Brazil and to a tentative positive change in momentum in China, Russia and India. In Europe as a whole the BCI continues to indicate a gain in growth. In France and in Italy, the BCI s continue to indicate a positive change in momentum. In Germany and the United Kingdom, the BCI s point to growth firming. See glossary for definitions 3.2 Purchasing Managers Index (PMI) Rising global demand supported a pick-up in manufacturing activity across the world increasing PMI from 52.1 in October to 53.2 in November, the highest level since May Economic conditions improved in several areas like expanding production, increasing new orders and job creation. Growth remained solid in Japan and the UK, with the PMI in each of these nations at their highest levels 6 since July 2006 and February 2011 respectively. The US manufacturing PMI rose to 57.3, from an already strong 56.4 in October Euro area manufacturing expanded for a fifth month in November, as Germany continued to drive the 17-nation currency bloc s gradual recovery from a recordlong recession. The manufacturing index rose to 51.6 from 51.3 in October. PMIs for Germany, Italy, the Netherlands and Austria all signalled expansion in November, with the rates of accelerating pace. France was the only nation to report faster declines in both output and new orders. Spain fell back into contraction, as well performing external markets could not outweigh weak domestic market. Overall, manufacturing across the region is enjoying its best performance for twoand-a-half years, but the pace of growth remains only modest. The data suggest that output is rising at a quarterly rate of only around 0.6% in the fourth quarter so far. The most promising recovery signs are largely confined to northern countries, with strong growth being recorded in Germany, the Netherlands and Austria. More southerly countries continue to disappoint, though, especially France and Spain, where renewed downturns are evident, commented Markit. See glossary for definitions 4 MT-IX The MT-IX showed a 6% increase in November. The index gained 12 points compared to October s value, and posted at 208 points in November Market value of machine tool companies decreased in the United States and South-Korea. Japanese companies showed stronger performance in their market capitalisation. European machine tool companies booked more varied results. However general view allows cautious optimism, 7 companies out of 11 included in our index saw an increase in their market capitalisation. See glossary for definitions 5.1 CECIMO production The CECIMO General Assembly in Vienna confirmed the production growth of 5

6 Introduction 8% in The production of the 15 CECIMO member countries is expected to record 22.4 billion euros in 2013 e.g. a marginal decrease of 1% compared to the previous year. The estimated global machine tool production will contract 7% in European advanced, state of the art machine tools are a globally successful and increasing the share in world machine tool production. CECIMO estimates a slight increase in its share of global production from 32% in 2012 to 34% in Further development and increasing labour costs in newly industrialised countries draw the attention on productivity and safety of the machines in this area European machine tools have a global competitive advantage. Germany, with estimated 48.2% share in 2013, is CECIMO biggest machine tool producing country. Italy and Switzerland together produce almost one third of European machine tools. The following places are occupied by Spain, Austria and the United Kingdom which produce 3% and more of total output. * * * * * 6

7 1.1 CECIMO orders 160 MT orders (index 100 = 2005) CECIMO orders vs shipments Foreign orders Shipments Total orders Domestic orders

8 1.2 Peter Meier`s forecast (1) 8

9 1.2 Peter Meier`s forecast (2) 9

10 2.1 GDP 170 MT orders (100 = 2005) GDP in EU 28 in billion in current prices MT orders 12M moving average GDP There has been a 61% correlation between quarterly GDP and 12- month rolling MT orders since Note: EU27 GDP measures the production in the EU 27 and is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X - M)

11 2.2 Interest rates - EURIBOR 6% Euribor rate MT orders (100 = 2005) 5% MT ORDERS 12M moving average 150 ECB refinancing rate 130 4% 12M EURIBOR quarterly average % 2% 3M EURIBOR quarterly average 90 1% 35% correlation between Euribor 12M & 12-month moving average of MT orders 70 0,52% 0,38% 0% source: Euriobor.org + CECIMO 0,22% 50 3Q13 1Q13 3Q12 1Q12 3Q11 1Q11 3Q10 1Q10 3Q09 1Q09 3Q08 1Q08 3Q07 1Q07 3Q06 1Q06 3Q05 1Q05 3Q04 1Q04 3Q03 1Q03 3Q02 1Q02 3Q01 1Q01 3Q00 1Q00 3Q99 1Q99 11

12 2.3 Industrial production index MT orders in CECIMO 8 (index 100 = 2005) A 88% correlation between industrial production and MT orders (12-month rolling basis) since Industrial Production - 12M moving average ,8 100 MT orders - 12M moving average Source: Eurostat + CECIMO 40 13Q3 13Q1 12Q3 12Q1 11Q3 11Q1 10Q3 10Q1 09Q3 09Q1 08Q3 08Q1 07Q3 07Q1 06Q3 06Q1 05Q3 05Q1 04Q3 04Q1 03Q3 03Q1 02Q3 02Q1 01Q3 01Q1 00Q3 00Q1 99Q3 99Q1 98Q3 98Q1 97Q3 97Q1 96Q3 96Q1 95Q3 95Q1 94Q3 94Q1 93Q3 93Q1 92Q3 92Q1 12

13 2.5 Capacity utilisation in the invest. goods sector Production capacity (Balance, sa) Capacity utilisation (%) Assessment of current production capacity Current level of capacity utilization MT Orders (smoothed index) MT Orders , Assesment of current production capacity - constructed as the difference between the percentages of respondents giving positive and negative replies. Respondents aswer the following qestion: Considering your current order books and the expected change in demand over the coming months, how do you assess your current production capacity? Answers are: The current production capacity is. + more than sufficient = sufficient not sufficient

14 2.7 Foreign exchange rates 170 CECIMO Foreign Orders Index 169 1,7 Units per 1 EUR (quarterly average) 1,6 150 CHF 1, USD 100JPY 132 1,4 1,35 1,34 1,3 1,23 1,2 90 CECIMO Foreign Orders 1, ,98 0,9 50 Source: oanda.com + CECIMO ,8 14

15 3.1 OECD Business Confidence Indicator (BCI) for Europe MT orders (100=2005) Business Confidence There is 82% correlation between BCI Europe+ 6 months and smoothed MT Orders in CECIMO 8 since 2001 Business Confidence 3M average with +6 month time lag , MT Orders - 12M moving average Business confidence shows a long-term trend in industrial production (with a 6-month time-lag). An increase over 100 means expansion; a decrease above 100 means a downturn; an increase below 100 is an upturn and a decrease below 100 is a slowdown 92 90,2 90 source: OECD + national associations Q13 3Q13 2Q13 1Q13 4Q12 3Q12 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 4Q10 3Q10 2Q10 1Q10 4Q09 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 4Q07 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 1Q04 4Q03 3Q03 2Q03 1Q03 4Q02 3Q02 2Q02 1Q02 4Q01 3Q01 2Q01 1Q

16 3.2 Purchasing Managers Index (PMI) - Global 145 PMI , ,2 51, Global 35 Eurozone USA -15 source: Markit Economics + National Statistics MT orders 30 16

17 3.2 Purchasing Managers Index (PMI) - Europe PMI , , ,6 51,4 48, Eurozone Germany Italy 33 Spain Switzerland source: Markit Economics 28 17

18 3.2 Purchasing Managers Index (PMI) - Asia PMI , ,4 51,3 50,8 50, China India 39 Japan source: Markit Economics S. Korea Taiwan

19 4 MT-IX MT-IX (index 100 = January 2005) CECIMO MTIX MT orders (Index 100 = 2005) CECIMO orders 160 There is a 68% correlation between MTIX 12 month moving average and CECIMO orders CECIMO MTIX 12-month moving average

20 5.1 CECIMO production

21 back Glossary Interest rates - Euribor Euribor (Euro Interbank Offered Rate) is the rate at which euro interbank term deposits are being offered by one prime bank to another within the EMU zone Industrial production index The objective of the production index is to measure changes in the volume of output at close and regular intervals, normally monthly. It provides a measure of the volume trend in value added over a given reference period. The production index is a theoretical measure that must be approximated by practical measures. Value added at basic prices can be calculated from turnover (excluding VAT and other similar deductible taxes directly linked to turnover), plus capitalised production, plus other operating income plus or minus the changes in stocks, minus the purchases of goods and services, minus taxes on products which are linked to turnover but not deductible plus any subsidies on products received. The division of production in construction between building construction and civil engineering is based on the classification of types of construction (CC). Statistical population: Production: sections B, C, D of NACE (D353 excluded); Base period: Year 2005 = Capacity utilization in the investment goods sector Population: Investment goods producers. Data covered: Assessment of current production capacity, measured as a balance (seasonally adjusted); Current level of capacity utilization, measured in % (seasonally adjusted). More than industrial firms are surveyed every month, while the biannual investment survey includes over units. Answers obtained from the surveys are aggregated in the form of balances. Balances are constructed as the difference between the percentages of respondents giving positive and negative replies. The Commission calculates EU and euro-area aggregates on the basis of the national results and seasonally adjusts the balance series. en.pdf 3.1 OECD Business Confidence Indicator (BCI) for Europe The Composite leading indicators (CLI), which BCI is part of, comprises a set of component series selected from a wide range of key short-term economic indicators to ensure that the indicators will still be suitable when changes in economic structures occur in future. While theory says that a turning point in the CLI signals a turning point in the reference series, such turning points, in reality, are determined by a complicated process. Therefore, one often needs to wait for several periods to draw a more definite conclusion. A useful way to exploit the information in CLIs is to take their year-on-year growth rate. The standardised BCIs represent only the manufacturing sector. BCI shows a longterm trend in industrial production (with a 6-month time-lag). An increase over 100 means expansion; a decrease above 100 means a downturn; an increase below 100 is an upturn and a decrease below 100 is a slowdown Purchasing Managers Index (PMI) The Global Report on Manufacturing is compiled by Markit based on the results of surveys covering 9,000 purchasing executives in 30 countries. Together these countries account for an estimated 86% of global manufacturing output. Questions are asked about real events and are not opinion based. Data are presented in the form of diffusion indices, where an index reading above 50.0 indicates an increase in the variable since the previous month and below 50.0 a decrease. 4 MT-IX MTIX is and index based on the capitalization of 23 leading, publicly listed machine tool producing companies. The capitalization of the companies included is weighted by the share of machine tool turnover in total revenues. The total capitalization calculated in that way is weighted then by and estimated share of the European companies in the world total output in