Global Recovery Not Expected Until 2025

Global Recovery Not Expected Until 2025

Worldwide profile machinery market, which experienced slight growth in 2023, is set to face serious stagnation in 2024, despite a slight increase in total market volume from EUR 1.02 billion to EUR 1.03 billion. The minimal growth is overshadowed by the challenging economic climate, driven by the war’s impact and inflationary pressures, leaving the market stuck in neutral. According to a recent study by Interconnection, a 3.3% global recovery isn’t anticipated until 2025, offering little immediate hope for the industry.

Soaring Prices Crush Investment Sentiment

The profile machinery sector, especially for profile bar machining centres, has been hit hard by rapidly rising prices, with some industry leaders hiking prices by 15% during 2022-2023. The sharp price increases have stalled demand, with profile bar machining centres still accounting for 47% of the total market value in 2023. Other segments, like cutting machinery (20%) and screwing and drilling machinery (just 2%), are faring even worse, facing anemic demand.

Despite Central Europe’s dominance, holding 26% of global market sales, the region is unlikely to experience any real recovery until 2025. Rampant inflation, high-interest rates, and a lack of governmental support have created a toxic investment environment across Europe, mirroring the situation in Germany.

Aluminium Takes Over as Other Materials Struggle to Compete

In 2023, aluminium machinery dominated the profile machinery market, accounting for 56% of global sales, and this trend shows no signs of slowing. With EUR 878.4 million in total sales across PVC, steel, and aluminium equipment, the aluminium segment continues to grow due to its superior material properties — lightweight, corrosion-resistant, and highly recyclable. Aluminium’s sustainability and versatility make it a top choice in construction, automotive, and aerospace industries, pushing its demand far ahead of competitors like PVC and steel.

The Americas are leading the charge, with 67% of the market dominated by aluminium machinery, while Europe maintains over 50%. PVC’s demand fluctuates with the construction industry, and steel machinery remains niche due to its heavier weight and lower recyclability, struggling to gain traction despite some companies investing in its future.

A Grim Outlook Until 2025

Despite minor growth in 2023 and 2024, the CAGR for profile machinery until 2027 is expected to hit 2.9%, with PVC machinery sales projected to reach EUR 404.5 million. Steel equipment remains a niche market, though some industry players are making small, forward-looking investments.

Aluminium’s continued dominance, driven by its widespread use and eco-friendly appeal, will keep it at the forefront of the market, securing over 50% of sales through 2025 and beyond. However, for the industry to truly break free from its stagnation, major economic shifts are required, alongside global recovery efforts expected in 2025.

Market Concentration Poses Challenges

The global profile machinery market remains highly concentrated, with just a handful of companies controlling most of the sales. European giants like Voilàp, FOM, Urban, Graf, Rotox, Schirmer, and Stürtz dominate, yet they reported a difficult 2023. The situation is mirrored outside Europe as well: Turkish companies Kaban, Murat, and Yilmaz are making moves into Latin America and Africa, while maintaining a strong grip in the Middle East. Meanwhile, APAC manufacturers like Tianchen and Parker are emerging as global forces after years of dominating their local markets.

The USA, typically a promising market, is also showing strength with local producers like Joseph and Pro-Line, though the current global climate has impacted even this market’s potential.

Conclusion

Despite 2023’s initial growth surge, the profile machinery market is in deep trouble. Spiraling costs, weak investment sentiment, and harsh economic conditions have left the sector on life support. Until 2025’s projected recovery, driven largely by aluminium demand, the market will remain in a holding pattern, with only slight incremental growth expected. The future of the industry depends on global economic stabilization — and time is running out.

20/03/2024

Copyright: Interconnection, free of charge for publication in the context of reporting on the study mentioned and IC Consulting.