Incoming orders to German plastics and rubber machinery manufacturers fell 30% in January through April versus the same months in 2022, but the sector ended last year with a price-adjusted sales increase of 10%, according to the plastics and rubber machinery division of the German engineering association VDMA (KuG, Frankfurt; www.kug.vdma.org).

In its annual report, the trade group said new orders last year slipped 6% from 2021 as production of core machinery climbed 13.6% to EUR 8.5 bn.

In May, Thorsten Kühmann, managing director of the division, cut growth expectations for turnover this year to 0-2% from 5-10%, citing logistics problems, concerns about procurement, the Ukraine War and China’s strict zero-covid policy.

However, Ulrich Reifenhäuser, chairman of the Plastics and Rubber Machinery Association at the VDMA, said the turnover figure from 2022 stems from the numerous orders the sector was able to attract in recent years and shows that supply chains have improved to some degree.

According to the report, order books are still reasonably full, which hints at a comparatively good sales year, although expectations for turnover from 2024 onwards are cautious. “We lost new orders last year, with a price-adjusted minus of thirteen percent, and in the first quarter of 2023 even more significantly at minus thirty-three percent” Kühmann said. This means fewer orders on the books that can be processed and converted into sales.

A global economy slowed by high inflation and increasing borrowing costs has trimmed hopes that demand will pick up again in the short term. The VDMA said promising growth areas for the industry include e-mobility, the electrification of vehicles, and the increasing demand for packaged foods.

At the same time, the transformation of the plastics industry towards a circular economy, said to be a driver of e-mobility and packaging demand, will require industry investment and restructuring to reduce carbon emissions or even to establish carbon neutral production.