VDMA General Ventilation Technology: Companies expect a decline in sales in 2024
The VDMA General Air Technology Association expects sales to decline in 2024: companies' production and exports are currently still in positive territory. However, a lack of orders, a shortage of skilled workers, geopolitical crises and the tense global economy are causing uncertainty.
In the first half of 2023, German production of general ventilation technology, excluding the air and gas liquefaction segment, increased significantly by 16% in nominal terms. German exports also increased by just under 8% in nominal terms between the beginning of the year and September. Demand from the USA remains high, although growth momentum has slowed in recent months. With a share of 55%, the EU remains the most important sales market for German suppliers. The downward trend in incoming orders is continuing. In the first nine months, orders fell by 16% in real terms. Foreign order activity in particular weakened. The existing high order backlogs are currently being processed. However, a lack of skilled workers and bottlenecks in the supply chains, particularly for electrical and electronic components, as well as considerable bureaucratic requirements continue to slow down business. General ventilation technology as a cross-sectional technology encompasses air conditioning and ventilation technology, refrigeration and heat pump technology, air pollution control, surface technology and drying technology. It is therefore used in a large number of customer sectors, whereby the sub-sectors generally show differentiated developments with very different signals.
The situation is currently becoming increasingly gloomy. According to the latest economic survey, companies in the general ventilation technology sector only expect nominal sales to stagnate in 2023. Due to rising price indices, this means an average real decline for the industry as a whole. Nominal turnover is expected to decline by 1% in 2024. Suppliers of building technology (air conditioning and ventilation technology) are already feeling the effects of the weak construction sector. This is also having an impact on other industrial sectors, which are also suffering from high energy prices, meaning that investments are being postponed. On the other hand, the current high demand for heat pumps and energy-efficient solutions, such as the replacement of old systems and energy sources, is driving the industry. "All general ventilation technologies are essential for efficiency measures in the building sector and for the energy efficiency of industrial applications. The impact of the ruling on the climate fund is not yet foreseeable for our industry. However, the political developments may lead to further economic uncertainty for the industry or at least to a delay in the implementation of technical efficiency measures in the building sector," says Robert Hild, Managing Director of the General Air Technology Association. Digitalization and automation, investments in supply security and the reduction of CO2 emissions offer good business opportunities. Positive impetus can be seen in areas such as data centers, battery production, the pharmaceutical and food industries and recycling. However, increased geopolitical risks, wars and growing protectionism are leading to uncertainties in supply chains and sales markets. Increasing regulatory density and bureaucracy as well as a shortage of skilled workers are making it more difficult for companies to operate and require market participants to be increasingly resilient.