Recovery in sight for machine tool industry

The UK’s machine tool industry is set to recover next year despite lingering pessimism within the sector, according to research firm Oxford Economic Forecasting (OEF). The Machine Tool Technologies Association believes the industry may be on target to return to its former economic peak thanks to the strength of the aerospace, computers and electronics sectors, […]

The UK’s machine tool industry is set to recover next year despite lingering pessimism within the sector, according to research firm Oxford Economic Forecasting (OEF).

The Machine Tool Technologies Association believes the industry may be on target to return to its former economic peak thanks to the strength of the aerospace, computers and electronics sectors, led by mobile phone manufacturing.

The machine tools industry is seen as a leading indicator of the strength of the manufacturing sector as companies invest early in machine tools in response to expected forward orders.

OEF forecasts a fairly slow improvement over the next two months, with orders picking up in spring 2000 and shipments seeing a corresponding boost by the second half of next year.

Keith Bailey, chief executive of BSA Tools, said the firm was experiencing a rise in sales of its less expensive imported goods, and was expecting an upturn in orders across its full range of products next year. The automotive sector, the biggest user of machine tools, was likely to step up investment soon, he said.

Geoff Lloyd, managing director of Heller Machine Tools, said activity was likely to rise next year, with many global projects coming to fruition. But he warned that the strength of the pound was still a concern, and that other machine tool makers did not share his optimism.

`Many people do not believe the figures,’ he said. `A lot of companies are taking orders at margins that can not possibly sustain a business in the long-term. They are covering their costs and surviving day-to-day.’

* The largest UK-owned machine tool maker, 600 Group, made a rare pre-tax loss of £744,000 for the six months to the start of October, down from a £3.89m profit last year. The company predicted a return to profitability by the end of the full financial year.