VDMA: Manufacturers of Environmental Technologies Look Boldly into the Future

"More than ever, genuine openness to technology is needed. The purpose of regulation must not be to select technologies. Instead, it must serve to facilitate access to the market for as many innovative ideas as possible. The strong industrial SME sector, as embodied by mechanical and plant engineering, is particularly reliant on this," says VDMA President Karl Haeusgen. "In addition, conflicting objectives must be resolved so that existing regulations do not contradict the circular economy."

In the VDMA Spotlight Area in Hall B4 239, 339, the focus was on mechanical and chemical recycling as well as initiatives to promote young talent. Bringing environmental technologies together and, in particular, highlighting the synergies between them was the theme of this year's VDMA presence at the trade fair. For the first time, all VDMA trade associations represented at the trade fair had been exhibiting together on one stand.

Waste and recycling technology: Domestic demand falling, high export quotas
Manufacturers of waste and recycling technology are expecting incoming orders to fall again in 2024 for the first time in many years. The industry is currently forecasting a decline of 0.8 percent. This means that the crises of recent years have finally put an end to the optimism that still prevailed among manufacturers at the start of 2023. A short-term economic recovery is currently not in sight for the industry. The weak overall economy, increased personnel costs, high energy costs and bureaucracy are leading to a lack of willingness to invest. Waste and recycling technology is particularly affected by the fact that the construction and packaging sectors, which traditionally use a high volume of recyclates in their products, are experiencing significant declines.

Domestic demand has fallen slightly compared to the previous year to 32 percent. Accordingly, the export share has increased by one percentage point to 68 percent. At around 62 percent, the EU countries remain the most important customer market for waste and recycling technology. North America remains the second most important export market with 11.1percent. It is followed by Asia with 6.7 percent.

Exports to China have improved significantly by 2.7 percentage points to 3.7 percent. Exports to the Near and Middle East region ranked lower with 2.8 percent, followed by South America with 1.5 percent and Africa with 0.9 percent.

General ventilation technology: Boost from general transformation of industry
The EU domestic market continues to play a major role in foreign trade for general ventilation technology: 54 percent of German exports went to the EU in 2023. However, exports to EU countries have been declining overall for several months. Business in the USA remains very robust.

"Incoming orders in the general ventilation technology sector showed a surprisingly positive trend in the first quarter of 2024. In addition, the industry's order backlog is comparatively high," comments Robert Hild, Managing Director of the VDMA General Ventilation Technology Association. This is mainly due to plant construction projects. This means that positive impetus can also be expected for process air technology (environmental technologies: air pollution control). The ventilation technology sectors are also benefiting from the transformation of the industry towards climate-neutral solutions (e.g. by converting energy sources).

At the same time, numerous crises and uncertainties in the geopolitical and economic environment as well as growing protectionism are making it difficult for companies in the general ventilation technology sector to develop further. Nevertheless, more and more companies are striving to establish climate-neutral production themselves. This requires manageable and reliable framework conditions in order to initiate viable investments. The EU internal market plays a central role here. Overall, the technological developments required for this offer numerous opportunities, particularly for manufacturers of ventilation products.

Industrial valves: international business ensures a good start to the year
The valves business developed well at the start of 2024. This was primarily due to strong business from abroad. In the period from January to February 2024, turnover abroad increased by 15 percent. In the eurozone, sales even rose by 25%. Domestic sales, on the other hand, fell by 2 percent. Overall, industry turnover was therefore 8% higher than in the same period last year. Adjusted for prices, this corresponds to an increase of 4 percent. In contrast, incoming orders in the German fittings industry fell by 2 percent on a price-adjusted basis at the same time.

"We are currently seeing positive growth impetus primarily abroad. The major customer markets in China and the USA are very relevant for us here. If the economy continues to develop well there and Europe also picks up speed again, the prospects for the valves industry will improve," explains Dr. Laura Dorfer, Managing Director of the VDMA Valves Association. "For the time being, we remain cautiously optimistic in view of the many uncertainties and expect nominal sales growth of 2 percent for 2024 as a whole."

After a good previous year, exports by German valve manufacturers once again recorded growth in the first two months of 2024. In total, industrial valves worth around 876.7 million euros were exported abroad. This corresponds to an increase of 1.3 percent compared to the same period last year. Exports to China, the most important customer country, continued to fall. Following a decline of 1.5 percent last year, they fell by a further 5.0 percent to 96.0 million euros in the period from January to February 2024. Export business with the second most important trading partner, the USA, increased by 0.5 percent to EUR 87.5 million.

Liquid pumps: increase in exports in 2023
Exports of liquid pumps (excluding hydro pumps) increased by 2.9 percent to 6.3 billion euros in 2023 compared to the previous year. In the first two months of the current year, exports fell by 2.7 percent year-on-year to 1 billion euros.
The most important customer market was the EU with 57 percent. The most important customer countries are the USA (682 million euros), followed by China (654 million euros) and the Czech Republic (441 million euros).

Imports fell by 2.8 percent year-on-year to 3.2 billion euros in 2023. The most important import countries were Italy (338 million euros), the USA (334 million euros) and China (325 million euros). Real incoming orders in 2023 were 12% below the previous year. In the first two months of the current year, a year-on-year decline of 15 percent was once again recorded.

Compressors, compressed air and vacuum technology: level maintained
Exports of compressors, compressed air and vacuum technology increased by 4.4 percent year-on-year to EUR 5.7 billion in 2023. In the first two months of the current year, exports rose by 6.1 percent year-on-year to 960 million euros. The EU was the most important buyer market with 49 percent, while the most important buyer countries were China (676 million euros), the USA (650 million euros) and France (296 million euros). Imports fell slightly by 0.5 percent to 2.9 billion euros in 2023. The most important import countries were Poland (316 million euros), China (278 million euros) and France (210 million euros). Real (price-adjusted) incoming orders in 2023 were 12 percent down on the previous year; in the first two months of the current year, they were down 8% on the previous year.

Christoph Singrün, VDMA Managing Director for both sectors, anticipates a challenging year for pump systems and compressors, compressed air and vacuum technology: "Despite the political crises, supply chains proved to be resilient last year. We therefore assume that we will be able to reach the previous year's sales level for compressors, compressed air and vacuum technology and that even a small increase is possible for pumps."

Process engineering: production up in 2023, exports stagnating
"The production volume of process engineering goods rose again in 2023," summarizes Richard Clemens, Managing Director of the trade association. Process engineering machinery and equipment with a total value of 10.7 billion euros was produced in Germany last year, an increase of 11.8 percent compared to the previous year.

While production developed positively, exports from Germany stagnated at a high level. In total, process engineering exports from Germany amounted to 7.5 billion euros in 2023. The decline in exports to the second most important market, China, which fell by 10.2 percent to EUR 645 million, is particularly noteworthy. Stagnation can be seen for the first two months of 2024. At around 1.8 billion euros, the value of process engineering machinery and equipment exported from Germany is roughly on a par with the same period last year.

Imports to Germany were also down in 2023. Imports fell by 2.5 percent to 2.8 billion euros. The USA remains the most important trading partner for both imports (332 million euros) and exports (814 million euros). More than 10 percent of imports in process engineering come from the USA.

In the first two months of 2024, price-adjusted incoming orders in process engineering (2023: minus 14 percent) fell by a further 24 percent compared to the same period of the previous year. Both domestic demand (minus 44%) and foreign demand (minus 14%) contributed to this.

In water and wastewater technology, a sub-sector of process engineering, there has been a positive trend in exports from Germany for years. In 2023, exports will be worth just under 1.3 billion euros (up 5.5 percent). "We are broadly positioned in the export business so that fluctuations in individual markets can be balanced out well," explains Dr. Marcus Höfken, Chairman of the VDMA Water and Wastewater Technology Division.