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The status of Machinery: the good, the bad and the future

27 July, 2017

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Date of Publication: 27 July, 2017
Machinery is the backbone around which a substantial number of market sectors develop and flourish. From Construction to Energy, from Manufacturing to Packaging, without mentioning Oil & Gas and Construction: these industries and many others strongly rely on Machinery for their persistence and evolution on the market. And here’s the catch: being so essential for other industries means also being dependent on them. That’s why the trends to look for are related to the overall market - and not just to the machinery sector itself.

The good.

Machinery is by its nature a high tech environment thriving on research, development and skilled craftsmanship. It is nearly impossible for new players to come and disrupt established market leaders overnight - so that surprise competition is not something to worry about.

Another stability factor is the long-term nature of the business cycle, which serves as a shock absorber for possible market mishaps.

 

The bad.

Financing will always be a pain point, since the Research & Development on which long term success is based requires abundant investment, with little-to-none short term returns.

Add to this that relying on other sectors means incurring in a wide variety of market troubles which machinery producers have no direct control on.

 

The future

Worldwide machinery is being shaped by China and USA, with other nations such as Germany and Italy playing important key roles.

Due to the increase in oil price, the final sectors expected to drive the machinery market in 2017 are Mining and Energy. Growing business opportunities are hitting the most advanced players in the Constructions sector. Agriculture is another industry to keep an eye on, thanks to a +12% food price rise last year, expected to trigger considerable investments in 2017. 

 

Overall, a somehow better 2017 is unfolding for the machinery sector - albeit with lower investments and a generally unexciting cash flow. But the future is set to get gradually brighter in the next years.

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