Electronic components are becoming scarce for many medium-sized companies.
(Photo: dpa)
Munich The German machine builders fear serious economic consequences from the Ukraine war. “The war will exacerbate the supply chain problem in particular,” said VDMA President Karl Haeusgen. There are also challenges such as direct sanctions and the dramatic rise in energy prices.
According to a quick survey by the industry association VDMA, 85 percent of companies see the war as a serious or noticeable risk for their business. As a consequence, the VDMA lowered its forecast for the current year. The machine builders now only expect an increase in production of four percent. Just a few weeks ago, the industry was forecasting growth of seven percent.
“For mechanical and plant engineering, business with Russia is not existential, but the companies will have to pay a price for the Russian war of aggression, which cannot be justified by anything,” said VDMA President Karl Haeusgen.
The machine builders had actually started the new year with a record order backlog and full of confidence. Many companies were already fully booked for the entire year, and the companies’ average reach was around eleven months. Last year, production in mechanical and plant engineering increased by 6.4 percent in real terms.
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However, the Ukraine war fundamentally changed the assessment of the situation. On the one hand, the high energy prices are putting the entire industry under great pressure. “The energy prices are no longer sustainable, we can no longer produce economically,” said Carletta Heinz, owner of the family-run glass manufacturer Heinz-Glas. In view of the additional costs, the willingness to invest in industry is falling.
>>Read more about this: High energy costs – German industry calls for state aid
VDMA President Haeusgen emphasized that energy prices have no direct existential significance for most machine builders – unlike in the glass industry. For most companies, the costs accounted for only one to three percent of the expenses. “In mechanical engineering, nobody falls over because of high energy costs, but the returns in certain areas are shattered.”
The problems in the supply chains and the scarcity of materials are causing greater concern for machine builders. Every third company in the industry is already confronted with serious difficulties. 42 percent also speak of noticeable disabilities. The escalation of the war in the past few days has not yet been fully taken into account. More than half of the companies expect the problems in the supply chains to worsen further.
Electronic components are becoming scarce
There are currently bottlenecks in the supply of electronic components in particular. Here, 52 percent speak of serious and 28 percent of noticeable problems. The waiting times are often more than half a year. “There are companies that have systems in the yard that are 95 percent complete, but a small electronic part is missing,” said Haeusgen.
Russia itself only ranks ninth in the export ranking of German mechanical and plant engineering. Ukraine is in 31st place, Belarus in 53rd place. The total export volume for the three countries is seven billion euros. “Above all, the indirect effects are unclear,” emphasizes the VDMA President.
The CEO of the supplier Hawe Hydraulics and VDMA President warns of delivery problems in the industry.
(Photo: Teichmann/VDMA)
The problems of the machine builders would be much greater if the economic relations with China came under pressure in the course of the global conflicts. “Of course we have a cluster risk here,” said Haeusgen, Chairman of the Supervisory Board and co-owner of Hawe Hydraulics SE. The association can only advise “to check the global sales distribution carefully”.
But there are also some positive signals in the industry. So far there have hardly been any cancellations. “It looked much more serious during the financial crisis,” said Haeusgen. Anything that can be produced will find a buyer. 84 percent of the machine and plant manufacturers surveyed continue to expect an increase in sales for this year.
More: High energy prices – German economy calls for state aid.