The worldwide corona crisis also clouds the business of German industrial valve manufacturers in the first half of the year.
Nevertheless, the industry has so far been able to hold its own in a difficult environment. While export business has been very subdued in the wake of the effects of the pandemic, domestic business has advanced to become the industry's driving force.
The long-term project business in particular has so far had a positive effect on sales. Against the backdrop of a very weak first half of 2019, domestic sales in the first half of 2020 even increased by 20%. Foreign business proved much more difficult in 2020, but was still 3% higher than in the previous year due to a successful start to the year.
"With sales growth of 9% in the first half of the year, German manufacturers of industrial valves can be very satisfied in view of the weakness of the global economy," comments Wolfgang Burchard, Managing Director of the VDMA German Valve Manufacturers Association, on the current situation. Although delivery bottlenecks have occurred here and there and orders have been cancelled, there has hardly been any need to resort to short-time working.
"The companies have adapted their business processes to corona conditions and taken comprehensive protective measures. For the time being, they are operating on sight," adds the Managing Director of VDMA Valves.
Business in all three product groups was encouraging in the first six months of the year. Nevertheless, there were varying degrees of development. The strongest growth was recorded in control valves, which increased by 15%, followed by safety and monitoring valves, which increased by 10%, and shut-off valves, which increased by 6%.
However, the outlook differs more widely. While the order situation for control valves indicates a significant decline, the signs for shut-off valves are currently stagnating, and the order book for safety and monitoring valves is still fairly full.
EXPORTS FALL
In the first half of the year, German industrial valve manufacturers exported goods worth 2.0 billion euros abroad. This corresponds to a decline of 8.6% compared to the same period last year. Export business with most trading partners was severely hampered by the numerous lockdowns in the wake of the pandemic.
In the case of China, the most important trading partner, business has since picked up again after a sharp dip at the beginning of the year and is now slightly up (plus 1.3%). In total, valves worth 264.1 million euros ($312 million) were delivered to the People's Republic. Also to Switzerland (7th place for exports), with 75.0 million euros, 8.2% more goods were exported than in the same period last year.
However, deliveries to the second most important customer country, the US, fell by 16.9% to 179.6 million euros. There were also significantly fewer valves shipped to France than in the previous year (minus 10.7%). The country nevertheless maintained its third place among the most important sales markets with a sales volume of 110.6 million euros.
STAGNATION FORECAST
The recent somewhat weaker trend in the order situation suggests that the economic downturn will also make itself felt in the industrial valves sector with some delay. Important customer industries such as oil and gas and chemicals, but also shipbuilding, are gradually feeling the effects of the economic downturn.
Larger investment projects are being postponed or cancelled. "In the second half of the year, we therefore expect to see stronger declines. Against this background, we currently only expect stagnation in 2020," predicts Burchard. -- Tradearabia News Service