2025 is expected to be another eventful and challenging year for the European industrial manufacturing sector. Despite the difficulties faced in 2024, including political and economic uncertainties that disrupted order intake and constrained growth, there is cautious optimism for the year ahead. This positive outlook is supported by signs of economic recovery, easing inflation, and sustained demand in key markets.
According to CECIMO, the European Association of the Machine Tool Industries, European machine tool builders experienced a 7.5% decline in production in 2024 compared to 2023, with consumption in CECIMO countries dropping by 11%. Despite these challenges, European machine tool builders maintained a significant global presence, accounting for approximately 32% of worldwide machine tool production. Trade data provided some encouragement, showing a 2% increase in exports in the second quarter of 2024 compared to the first quarter, along with a 3% rise in imports during the same period. Key export destinations included the United States and China, while major sources of imports were Japan, Taiwan, and China. However, broader geopolitical tensions and a global economic slowdown led to a 12% year-over-year decline in the total orders index for CECIMO8 (the largest machine tool-producing nations in Europe) during the third quarter of 2024.
In Italy, according to UCIMU, the Italian Machine Tool Robot and Automation Manufacturers Association,manufacturing production fell by 11.4% in 2024, driven by a 33.5% decline in domestic deliveries due to weak investment activity among Italian users. Household consumption also collapsed by 34.8%, resulting in a significant drop in imports of 36.5%. Despite these domestic challenges, Italian manufacturers achieved a record-breaking 6.3% growth in exports, reaching $4.6 billion, with the export-to-production ratio climbing to 66.6%.
CECIMO’s projections for 2025 are promising, forecasting that machine tool consumption levels in CECIMO countries will grow by 4.1% while global machine tool consumption is anticipated to rise by 7%. This recovery aligns with broader economic forecasts, which include a 1.5% growth rate in the European Union and a continued reduction in inflation to 2.4%.
In Italy, UCIMU forecasts a moderate rebound in production, expected to reach $7.11 billion, which represents a 2.9% increase compared to 2024. Although growth may be modest, it signifies a return to positive territory, underscoring the resilience within the Italian manufacturing sector.
The European automotive industry, a key component of the industrial manufacturing ecosystem, faced significant challenges in 2024. Economic pressures, geopolitical uncertainties, and evolving regulatory frameworks contributed to a slowdown in vehicle production and demand. Job losses among automotive suppliers surged, and investment in new technologies struggled to keep pace with the sector’s transformation toward electrification and sustainability. However, certain markets showed signs of recovery, with increased exports and improved sales figures in specific regions, suggesting potential stabilization in 2025.
In conclusion, while 2024 presented considerable challenges for Europe's industrial manufacturing and automotive sectors, the foundations for a potential recovery in 2025 are being established. The industry's ability to adapt to evolving market dynamics, technological advancements, and global competition will be crucial in shaping its trajectory in the coming year.
A few recently announced projects and investment news items are listed below for your reference.
The ChipNL Competence Centre in the Netherlands was launched to enhance technological capabilities and stimulate innovation within the Dutch semiconductor ecosystem. With a budget of $13 million allocated for the next four years, ChipNL focuses on semiconductor manufacturing equipment, chip design, integrated photonics, quantum technologies, and heterogeneous integration.
Stellantis and CATL are set to invest up to $4.2 billion in a joint venture to establish a large-scale lithium iron phosphate (LFP) battery plant in Spain. This joint venture will build a new LFP battery facility at Stellantis's site in Zaragoza, with production expected to commence by the end of 2026.
Feintool, a Swiss-owned manufacturer of precision electrical steel and formed steel components, is investing $35 million to expand its Tokod facility in Hungary. The expansion will add 6,740 square meters to the existing plant, with the new production unit scheduled to start operations in late 2025.
Instalaza will invest $53 million in an industrial plant in Zaragoza, Spain, to increase production capacity and advance missile design. This investment includes funding for research and development as well as infrastructure upgrades to produce subsystems for missiles and other munitions.
Axens, a subsidiary of OFEM, is progressing with plans to establish a production plant for cathode active materials used in electric vehicle batteries in Saint-Saulve, France. This investment is estimated to total $512 million, and the plant is expected to begin production in 2028. It will create 400 jobs and have a production capacity of 25,000 to 30,000 tons per year.
WEG S.A., an industrial equipment manufacturer, has announced an investment of approximately $28 million to build a new gearbox production facility in Manisa, Turkey. The project is expected to be completed by 2027. The new factory will be established in a 12,000-square-meter building located about 35 kilometers from Izmir and will focus on producing industrial gearboxes.
For more information, please contact Conchi Aranguren at caranguren@AMTonline.org.
