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    German machine-tool makers forecast output slide in 2020

    FRANKFURT AM MAIN (AFP) – Companies in Germany’s VDMA machine-tool makers’ federation expect production to fall back next year, the group said yesterday, in a further sign of trade conflicts’ impact on the export-oriented nation.

    Output at the factory suppliers is forecast to drop two per cent year-on-year in 2020, the same pace as it predicts for this year, the VDMA said.

    Along with cars and chemicals, machine-tools are one of Germany’s biggest industrial sectors and a vital export industry.

    “The trade dispute between the USA and China and a growing protectionism around the globe have a big impact,” VDMA Chief Economist Ralph Wiechers said in a statement.

    On top of that have come “the global economic downturn, Brexit and structural change in key customer groups” such as the car industry, which is turning increasingly towards electric vehicles, he added.

    Traditional buyers are holding off decisions to invest heavily in factory machinery and new installations, especially as “sustainable change for the better is not foreseeable in the near future,” Wiechers judged.

    The VDMA’s warning comes as the most recent Markit purchasing managers’ index (PMI) – a key indicator of future activity – fell again in September, hitting 41.4 points in a preliminary reading released yesterday.

    Well below the 50 points marking the boundary between growth and contraction, the index was its lowest level since the 2008 financial crisis.

    File photo of the Frankfurt, Germany skyline. Companies in Germany’s VDMA machine-tool makers’ federation expect production to drop two per cent next year

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