The Effects of the Great Uncertainty on Machinery's World Trade: 2020 Outlook
Deep reduction in world trade expected in 2020, but with significant differences at sectoral level
Published by Marcello Antonioni. .Planning Great Recession Industrial equipment Global demand Forecast International marketing
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After a 2019 of progressive uncertainty, 2020 is expected to highlight a deep fall in global demand for Machinery
After having recorded an overall weak 2019 (-1.4% year-on-year compared to 2018 in euro), due to increased uncertainty and the slowdown in the international economy in H2-2019, world trade in Machinery is facing the "perfect storm" of an international slowdown already underway and a COVID19 pandemic crisis with still uncertain outcomes.
As already happened in 2009, at the outbreak of the Great Recession, when world demand for Machinery1 fell by almost 28 percentage points in euro, the current scenario will lead to a significant reduction in world trade in the sector, even if the healthcare framework is gradually normalised and the international economy picks up again from the third quarter of the year2.
Although growth prospects are very uncertain, according to the forecasts formulated by StudiaBo3 and based on the recent World Economic Outlook of the International Monetary Fund, in the average of 2020 world demand for Machinery is expected to experience a reduction of more than 17 percentage points in euro.
The "rebound" of the international economy expected for the 20214 will allow a party recovery (+12.6% in euros) of world trade in Machinery.
Also in the following two years (2022-2023) the annual levels of world trade in the sector are expected to remain below the threshold of 250 billion euro (value recorded by world trade in machinery and plants in the two-year period 2018-2019).
World Trade of Machinery by Sector
|Values 2019||CAGR in EUR|
|Metalworking Machine Tools||65.6||-35.6%||+22.2%||+0.9%|
|Ind'l Robots and other Metal Processing M.||10.9||-6.7%||+6.7%||+2.4%|
|Machine Tools for hard materials||10.4||-18.8%||+11.7%||+1.1%|
|Other special purpose machinery||66.8||-13.0%||+12.5%||+4.3%|
In the 2020 scenario machine tools will be the most penalized sector (with expected decrease greater than 30% in €)...
Forecasts for 2020 predict particularly significant repercussions on Machine Tools world trade, especially for Metalworking (with an estimated drop of 35 percentage points); Machine Tools for hard materials is expected to show a (bit less severe) decline close to -20 per cent.
..double-digit declines also for textile, extrusion, printing and paper-making machinery...
Forecasts for 2020 show significant decreases - albeit relatively smaller - also for world trade in Textile Machinery (-16.8% in euro values), Paper-making Machinery (-12.5%), Extrusion Machinery (-12.1%) and Printing Machinery (-11.2%).
..less negative performances, instead, for food-, converting&packaging machinery and industrial robots.
On the other hand, industrial automation, agribusiness and packaging&converting will be investment segments relatively less affected by the global recessionary effects.
In fact, the forecasts for 2020 predict a (relatively) moderate decline in world trade trends for Industrial Robots (-6.7% in euro compared to 2019), Packaging Machinery (-6.4%) and, above all, Food Machinery (expected to show a reduction of just 2 percentage points in euro values).
1) See the list of the sectors included in this industry in the related industry description.
2) This assumption is the one underlying the macroeconomic scenario formulated by the International Monetary Fund (IMF) in its latest publication "World Economic Outlook" (WEO) of April 2020. The database is available in ExportPlanning: Database WEO.
3) Studiabo Forecasts are based on the estimations of two structural phenomena:
4) Please refer again to the macroeconomic scenario formulated by the IMF: World Economic Outlook-April 2020.