World demand for engineered products looks set to soften over the coming year, according to a report last week from broker Commerzbank Securities.
Drawing on a demand outlook from SKF, the world’s largest manufacturer of bearings, the report says European engineering firms will face a slackening of both demand and earnings growth during 2001.
`SKF’s statement suggests the industry has just passed through the peak of the demand cycle,’ said Commerzbank.
SKF reported sales up 5.1% to SEK20bn (£1.5bn), with robust market demand over the past year. But it said US demand was flat, and growth was slowing in the Asia/Pacific area.
With relatively small inventories across the industry, bearing demand tends to fall off about six months ahead of general industrial products.
Production plans among 17 of the largest European engineering companies showed a downturn in June, the first dip since January 1999. `This in our view is the most reliable indicator of future production, and generally leads production by six months,’ the report concludes.
Copyright: Centaur Communications Ltd. and licensors