ORGALIME Aisbl Diamant Building Boulevard a Reyers 80 B1030 Brussels Belgium

The European Engineering Industries Association

Tel: +32 2 706 82 35 | Fax: +32 2 706 82 50 | e-mail:

Ass. Intern. A.R. 12.7.74 | VAT BE 0414 341 438

Brussels, 5 November 2014

2014: After a slowdown in 2013, turnover in 2014 will increase by 1.1%

Orgalime estimates that the engineering industry’s turnover in the European Union just exceeded €1700 billion in 2013, which is still below the levels achieved overall in the EU in 2007.

However, Orgalime industries showed a strong growth in the first quarter of 2014. Although, in the second quarter turnover decreased in all sectors of the industry, Orgalime economists estimate that a modest 1.1% growth in turnover will be achieved for 2014 as a whole.

Commented Sandro Bonomi, President of Orgalime, “Credible economic forecasts and forward-looking surveys revised their expectations towards a slight deterioration in worldwide and foremost European economic performance. However, Orgalime economists estimate that a 1.1% turnover growth in 2014 for the European engineering industries should be achieved. Positive expectations should mostly be attributed to strong efforts at the level of innovation, but we are still seeing a performance at the level of growth which is well below historical trends. This is disappointing but not surprising given the morose investment climate in Europe.”

It is indicative that the IMF announced a global growth forecast of 3.3% for 2014, which is 0.4% lower than the expectations in April. For 2015, the IMF has also lowered its growth forecast to 3.8%. Moreover, the OECD’s composite leading indicators point to a slowdown in the growth rates for Europe, whereas they foresee stable growth for other major economies.

Concluded Adrian Harris, Director General of Orgalime, “The economic indicators only represent the reality of European companies whichcontinue to face uncertainty stemming from internal and external risks. These are namely:

low inflation in the EU and the possibility of a Japan-style deflation scenario
lingering uncertainty about the commitment of regulators to really make the necessary effort to attract manufacturing investment to Europe
uncertainty about the Chinese economy and its possible slowdown
geopolitical concerns, especially with the situation in Ukraine and its consequences on trade relations with Russia, a significant trading partner for the engineering industries and the conflicts in the Middle East which may lead to rise in crude oil prices.”

Nevertheless, the European engineering industries remain Europe’s major industrial employer, with some 10 million employees. While turnover contracted by 1.5% in 2013, employment decreased by 0.9%. In 2014 and 2015, employment is expected to stabilise, but it will require a much clearer signal that manufacturing industry, Orgalime industries’ main clients are reinvesting in Europe again before we can expect to see any fundamental change at this level.

Ends

Notes for Editors:

Situation in sectors

Annual change of turnover in European Engineering Industries

Situation in sectors

Sector / year / 2013 / 2014
(estimate) / 2015
(forecast)
Electrical, ICT, Instrument engineering / -3.2 / 1.0 / 0.7
Mechanical engineering / -1.2 / 0.9 / 1.5
Fabricated metal goods / -1.5 / 1.4 / 1.5
Total Orgalime industries / -1.5 / 1.1 / 1.2
Employment / -0.9 / 0.1 / -0.1

Electrical, electronics and instrument industries

The electrical, electronics and instrument industry is among the largest industrial sectors in Europe. Its 2013 turnover reached€630 billion in total. The sector employed an estimated 3 million people (including medical and dental equipment industries).

In 2013 the sector contracted by 3.2%. For 2014, 1% growth is expected and growth will continue at moderate level in 2015 (0.7%).

Mechanical engineering industry

The European mechanical engineering industry accounted foran annual turnover in 2013 of around €620 billion. The sectors’ employment is estimated at more than 2.9 million people.

The sector showed the smallest contraction (-1.2%) of the engineering industries in 2013. However, it is estimated that this sector will also show the slowest recovery in 2014 as it is expected to grow by 0.9% only. Thereafter the industry is expected to grow at a faster rate in 2015, where it is estimated there will be growth in turnover of at 1.5%.

Fabricated metals and metalworking industry

The fabricated metals and metalworking industry’s turnover in 2013 is estimated at almost €460 billion. In terms of employment this is the largest sector of the European engineering industry with around 3.6 million staff.

The sector produces, to a large extent, inputs and products used in other engineering sectors such as machinery. As the performance of the entire engineering industry deteriorated in 2013, turnover in the fabricated metals and metalworking industry deteriorated as well and contracted by 1.5%.

As in the other engineering sectors, growth in the fabricated metals and metalworking industry is expected to return in 2014 where it is expected to reach 1.4%. In 2015 this should rise slightly to reach a growthof 1.5%.

For further comments, please contact

Mr Adrian Harris Director General, ORGALIME, Brussels

+32 2 706 82 42

The European Engineering Industries Association

Tel: +32 2 706 82 35 | Fax: +32 2 706 82 50 | e-mail:

Ass. Intern. A.R. 12.7.74 | VAT BE 0414 341 438