China leads machinery production growth while others also recover
Despite the world recession, China was still able to maintain growth in machinery production in 2009. Although there was a dip from the incredible growth rates of the preceding years, output still grew; in almost every other country there were steep declines.
Growth in China is predicted to increase in 2010 from the 2009 level, without quite reaching the 20% plus growth seen before the economic downturn. Continued growing domestic demand, with higher levels of disposable income and large government investment, underpins this return to stronger growth in machinery production.
Of the major industrial nations, the US is expected to be amongst the strongest performing in terms of growth in 2010. The US was one of the first into the downturn, and subsequently one of the earlier nations to return to growth. The recovery in the automobile industry, which benefited from large government stimulus packages, is helping drive growth in machinery production revenues in 2010.
Germany, the leading European producer of machinery, suffered badly as its exports declined throughout the economic downturn. Recovery in Europe started slightly later than in America and is being tempered by concerns in several countries over vast sovereign debt and the effects of austerity programs to address it. Growth in Germany is being primarily driven by a recovery in exports which are benefitting from a weak Euro.
Japan’s machinery production, like that of Germany, relies heavily on exports; and so suffered badly as a result of the drop-off in trade of 2009. As with all the other countries considered, growth in 2010 is predicted, although it will be limited. The Japanese machinery sector had benefitted from government incentives; however these have recently come to an end. In addition to this, a strong yen is adversely affecting the competitiveness of Japan’s exports.
About IMS Research
IMS Research (www.imsresearch.com) is a supplier of market research and consultancy services on a wide range of global electronics markets. The company headquarters is in Wellingborough, UK with offices in Austin, Texas and Shanghai, China. IMS Research regularly publishes detailed research on the Industrial Automation markets, among others.
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