This press release is from the Mechanical Engineering Industry Association (VDMA)
•Export share of German manufacturers exceeds 70 per cent.
•German companies occupy 20 per cent of the global market.
•Turnover in 2018 reached 940 million euros
•World leader CMS is a platform for innovations
“In an increasingly uncertain market the volume of orders received by the German cleaning machinery industry since 2013 has remained remarkably stable. This is remarkable, considering the fact that relatively short throughput times and order backlogs of only a few weeks require an ability to react sensitively to all the various factors influencing the market. In 2018 turnover by the industry in Germany was about one per cent below the previous year’s level and is currently about 940 million euros", said Markus Asch, Chairman of the Cleaning Systems Trade Association in the VDMA, at the CMS meeting with the press on 13 May 2019 in Berlin. “During the fourth quarter the market was impacted in particular by uncertainties in the global economic situation.”
In Germany around 50 suppliers of cleaning systems for commercial and industrial use employ a workforce of approximately 5,400. In 2018 the export share of German manufacturers was around 71 per cent. German companies accounted for close to 20 per cent of the world market and around 50 per cent of the European market.
Growing uncertainty due to trade wars and Brexit
On the home market business was stable during the first quarter of 2019, while still below last year’s first-quarter figures, which were above average. The export market remained turbulent however. The industry increasingly felt the effects of a “wait and see” approach by customers, due to the trade war between China and the US, but also due to the critical and wavering course of the UK and the EU over Brexit. Currency fluctuations affecting important markets were of particular concern.
This dampened the competitiveness of our industry in terms of pricing and also reduced profit margins considerably. Among machinery manufacturers the perceived political imbalances in the European Union are a cause for concern. In the run-up to the European elections at the end of this month right-wing leaning parties in particular are increasingly calling our common European values and the need for a strong European bond between all the nations into question. A recent survey by Bertelsmann-Stiftung found that over 10 per cent of the electorate intend to vote for right-wing parties and over 6 per cent for the left.
The cleaning machine industry is only one of many that are finding it difficult to deal with the US market. ”We can however take solace from the fact that not everything we feared two years ago has come to pass. Nevertheless, since Donald Trump became president US decision-making has become erratic and impossible to predict“, said Asch. The constant flexing of muscles by the USA, trade conflicts and the imposition of new tariffs are undermining global business, the consequences of which are clear to see as important markets make downward adjustments to their GDP forecasts.
Lucrative markets in China and India
The situation in China, one of the most important sales markets, is equally difficult to judge. From last year until now the domestic market for the cleaning machine industry was in good shape, with good prospects for future growth. For our Chinese colleagues the export situation is more problematic. Barely has the trade war with the US subsided than another conflict is surfacing. On the one hand the import ban on Iranian oil is a problem for China, on the other hand it is driving up prices, which benefits high-cost shale oil production in the US. The resulting uncertainty has already significantly dampened the Chinese economy and is also having a damaging effect on our own industry. As the new Belt and Road Initiative unfolds we are taking great interest in its progress. It appears that the Asian superpower is increasingly looking towards Europe again, despite the fact that China is critical of developments in a number of areas, as regards the euro and the hesitant approach of European decision-makers for example.
In India the cleaning machine industry is growing at a remarkable rate. However, its overall volume is still insufficient to offset negative trends in other important markets.
Focus on technology-driven optimisation
In addition to the economic situation the main issues for cleaning machine manufacturers are digitisation and European technology directives. The digital transformation, automation and robotics are the subject of a broad and very lively debate. What is certain is that for the foreseeable future humans will be indispensable for carrying out many cleaning tasks. Technology can no doubt help with cleaning offices and hotel rooms. Cleaning personnel remain necessary nonetheless. That is why we see it as our main task to make the job of cleaning staff easier, to improve ergonomics and increase productivity. Optimising cleaning processes this way not only reduces costs but also improves quality. Fully automating an entire cleaning process rarely makes economic sense and can usually only be achieved with large surfaces. The path to comprehensively automating cleaning processes remains a long one, however. The benefits of digitisation lie with exploiting existing user and building information, which is something facility managers and cleaning companies must make use of in order to improve efficiency. The object must be to create new products, particularly services that can take on the market, in order to round off the cleaning service spectrum and offer customers added value.
The issue that currently concerns, indeed irritates us – not just with European elections around the corner – is the way in which Brussels implements its policy goals. Even the simplest technology is complicated enough for EU regulations such as the ecodesign directive to be able to cause harm to our domestic industry. Thus, the energy label regulation for vacuum cleaners, whose introduction followed many years of numerous scientific studies, consultations and standardisation, had to be annulled by the EU Commission at short notice. A competitor from a country leaving the EU had filed a lawsuit with the European Court of Justice, successfully claiming that the vacuum cleaner tests bore little relevance in practice. The high costs incurred for testing facilities, the actual tests, the labelling of devices, and their later removal and the resultant marketing and communication costs potentially imperil the existence of smaller manufacturers. Policies that support the needs of small and medium-sized enterprises require a different approach.
In 2019 CMS will highlight innovations in the industry. At the same time new technological developments are a major attraction at CMS 2019, which this year has expanded considerably with the addition of another entire hall: “The situation in which CMS 2019 is taking place is an encouraging one, because of the many new items that can be displayed here, and we need all these innovations. The aim is to improve performance and competitiveness and to become more efficient”, Asch noted. The Purus Innovation Award, which this year is taking place for the eighth time, will once again honour standout innovations. “The members of the cleaning machine industry are looking forward to CMS 2019 as well as lots of interesting meetings with numerous visitors, to establishing new contacts and to even greater international participation", said Markus Asch.