Leading trade credit insurer Atradius has shared its insight into the Eastern and Western European manufacturing sector in its latest Market Monitor report.
The monthly publication analyses different sectors each month, highlighting how the sector is faring so Irish companies can have an accurate picture of the risks of trading overseas. This month’s Market Monitor, with a focus on manufacturing, found that disparity in the European picture with a different view of risk within each country.
Michael Westra, Head of Global, Atradius UK & Ireland, said: ‘The wellbeing, or otherwise, of companies in the manufacturing sector has many dependencies: domestic demand, the economic prospects of the Eurozone, competition in Asian markets, and the fortunes of the industries to which those companies sell.
“In Germany, while German machinery and engineering is the envy of the world, and its exports are looking healthy, those firms supplying to the print industry are experiencing increased raw materials and price cuts in the face of tough competition. In Austria, again while the general outlook is positive, those supplying machinery for textile and paper production have been so hard hit that the subsector has been virtually wiped out. In most of the countries featured in this edition of Market Monitor, those companies providing machinery and engineering to the construction industry are finding life hard in the present economic climate.
“In my opinion, there is currently no single viewpoint representative of the entire European manufacturing sector. This reinforces the need for Irish businesses looking at overseas trade to be fully conversant with the risks involved and to protect themselves on a case by case basis, rather than adopting a one-size-fits-all approach.’
Highlights from Atradius’ Market Monitor include:
The outlook for metals and machinery has improved since the economic crisis began, and this may be partly explained by recent improved productivity in the Danish industry – although it still has a long way to go to regain its former competitiveness
Export and domestic orders need boosting after dipping in Q2 2012; particularly since 70% of turnover relies on foreign markets
High risk manufacturing sectors include agriculture while wind turbine suppliers/manufacturers are stronger due to an increase in exports.
Rise in bankruptcies but with stablisation within specific sector areas due to demand from the aerospace, rail, energy and chemicals sectors
Increase in industry production predicted of between 3 and 4% but there is a slowdown in growth of exports
High risk sectors include those linked to the construction sector, shipbuilding and automotive with stronger performances within handling and lifting equipment.
The mechanical engineering sector continues to be the most important driver of corporate Germany and biggest industrial employer
Traditionally export oriented, with of 75% of machinery turnover earned from foreign sales, and 6 months of orders on hand and capacity utilisations of 88.7%: However, imports are rising more than exports
Overall positivity in sector but close attention to buyers’ operating results liquidity and financing remains. Risk sectors include suppliers of the print industry.
Atradius’ Market Monitor also includes reports on Italy, Russia, Austria, Belgium and Czech Republic. To read the full report, visit www.atradius.ie