The sector is expected to see an increase in output of 4.8 percent in 2006, some 2 percent above the long-term average for the industry. A rather strong growth of extra-EU exports of almost 10 percent has been one of the key factors contributing to the growth of the sector. Intra EU trade also grew by some 6.8 percent in 2006 due to rather strong demand of investment goods throughout Europe. In Austria, Finland, Holland and Spain the sector grew strongly in 2006. All sub-sectors are doing well, with the machine tool and mechanical power machinery performing particularly strongly. After more than 2 years of strong demand in investment goods worldwide, new capacity and modern technology has been installed in many companies and therefore demand for this sector’s goods is now expected to level off. The growth in extra-EU trade is expected to decelerate fairly rapidly and the EU engineering industries’ own capital formation is expected to only reach a modest growth of 3 percent in 2007. As a result, growth in output is expected to slow in 2007 to some 2.3 percent.

Picture Courtesy of Orgalime