Orgalime Blog

After several excellent years, with a strong expansion for European engineering, prospects for the coming year are somewhat bleak. Apart from the expected and usual cyclical slowdown that started in the last year, the recent global financial turbulence is beginning to have an impact on the demand of both capital goods and consumer durables manufactured by the industry. On the basis of early September data, output in the European engineering industry in terms of volume is expected to grow by 3.0 percent in 2008. However, credit restrictions and financial uncertainty, a drop in incoming orders and rising unsold inventories, in combination with lower capacity utilisation are contributing to a negative sentiment in the industry, leading our economists to forecast a growth in the production volume of the European engineering industry of just 1.2 percent in 2009. Business indicators signal at the same time that a contraction cannot be ruled out at this stage, even if this is not the baseline assumption of our economists.

In this uncertain context, Orgalime calls upon European and national regulators to take into account the importance of this major manufacturing sector to the economy as a whole by ensuring that the framework conditions for the engineering industry and its customers in the EU are not allowed to deteriorate. Our President, Robert Mahler, stated at Orgalime’s annual General Assembly in Milan, “It is high time that that the European institutions & national governments appreciate the fundamental contribution that our industry – the EU’s major manufacturing sector – provides to the European economy. The goods and services that our companies provide create real jobs and real wealth: this is particularly important at a time when the financial sector has shown its limitations and is no longer providing the support that the economy, including manufacturing industry, has come to expect of it. It is therefore particularly important at this time, that governments and the EU institutions should get their priorities right: they need to focus on helping our companies to keep our skilled manufacturing jobs here in Europe, rather than on pushing a dogmatic regulatory agenda which imposes significant short term investment requirements on EU manufacturers alone. This only increases the temptation of companies to redeploy investment outside the EU. And our figures show that this is happening, so now really is the time to take initiatives for growth and jobs.”

http://www.orgalime.org/News/news.asp?id=284

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