Industrial valves manufacturers feel slowing demand

The industrial valves sector performed well in 2023 despite adverse conditions. After a pleasing start to the year, however, the outlook became increasingly gloomy over the course of 2023. Overall, a nominal increase in turnover of 3 percent was achieved. Domestic business improved by 4 percent. In contrast, foreign sales only increased by 1 percent. However, the 3 percent sales growth corresponds to a price-adjusted decline of 6 percent.

Bureaucracy and shortage of skilled workers weigh on companies

“As in the previous year, turnover growth in 2023 is primarily due to inflation. Against the backdrop of the continued sluggish economy in Germany and Europe, industrial valves manufacturers are facing a variety of challenges,” says Dr. Laura Dorfer, managing director of the VDMA Valves Association, explaining the current situation. “While order books were still full at the beginning of 2023, the number of orders fell towards the end of the year. Our members are also suffering from an excess of regulation and bureaucratic obstacles. The shortage of qualified specialist staff is also becoming increasingly noticeable.” 

Despite these challenges, the coming months also offer opportunities. There are many indications that inflation will continue to weaken over the course of the current year, which should lead to an improved mood in the industry and give the general economy a boost again. 

“Basically, the valve industry is well positioned and offers the right solutions for future topics such as the energy transition, hydrogen, clean water and the circular economy. In the coming months, companies in the industry will use the leading international trade fairs IFAT, ACHEMA and Valve World Expo in Germany, among others, to draw attention to their promising product portfolio. Against this backdrop, we expect a weak first half of the year in terms of sales but are counting on an improvement in the second half of 2024. We are currently forecasting stagnation for 2024 as a whole,” says Dorfer.

Safety and monitoring valves take the lead

Safety and monitoring valves again performed best in 2023, with nominal sales growth of 6 percent. Shut-off valves recorded a 4 percent increase in sales. Control valves, on the other hand, which had posted good results in previous years, recorded a slight decline of 1 percent. While domestic business was better than international business for shut-off and control valves, safety and monitoring valves performed better abroad. The outlook for shut-off and safety and monitoring valves is better than for control valves. According to VDMA figures, incoming orders are 4 percent down on the previous year in real terms.

Top export market China loses importance 

In nominal terms, exports by German valve manufacturers once again recorded growth in 2023. In total, industrial valves worth around 5.1 billion euros were exported abroad. This corresponds to a nominal increase of 5.2 percent compared to 2022. However, adjusted for price, this equates to stagnation at the previous year’s level.

Source: VDMA.

Exports to China, the most important customer country, continued to fall. Following a decline of 6.8 percent in 2022, they fell by a further 1.5 percent to 567.9 million euros in 2023. The export business with the second most important trading partner, the USA, continued the success of the previous year and climbed again by a strong 11.6 percent. Exports thus amounted to 537.3 million euros. At the same time, exports to France increased by 7.1 percent. The country remained the third most important sales market with a sales volume of 313.0 million euros. With an impressive increase of 25.5 percent to 180.4 million euros, the Czech Republic took 10th place among the most important customers.

The VDMA represents 3600 German and European mechanical and plant engineering companies. The industry stands for innovation, export orientation and SMEs. The companies employ around 3 million people in the EU-27, more than 1.2 million of them in Germany alone. This makes mechanical and plant engineering the largest employer among the capital goods industries, both in the EU-27 and in Germany. In the European Union, it represents a turnover volume of an estimated 860 billion euros. Around 80 percent of the machinery sold in the EU comes from a manufacturing plant in the domestic market.