Policy issues at European level affecting the mechanical engineering industry are handled by Orgalime's Mechanical Engineering Liaison Committee (MELC) and technical issues are dealt with in detail by the Technical Harmonisation Group (THG).
Mechanical engineering is one of Europe’s largest industry sectors with a share of some 8% of total EU manufacturing output. It is also one of the largest employers with some 24 500 companies (mostly SMEs) employing 2.6 million people. With 41% of the world market, Europe is the world's largest producer and exporter of machinery.
Mechanical engineering is an essential part of the industrial fabric of Europe. It is not only a supplier of capital goods to all other sectors of the economy, but it is also a significant consumer and provider of materials produced by the primary industries and increasingly a consumer and provider of services. Moreover, mechanical engineering provides not only the equipment, but also the skills and knowledge for improving existing processes and for developing new products in other industries. Its prime customer is the manufacturing industry. It is a highly cyclical industry whose performance depends on the investment cycles of its clients.
Mechanical engineering provides the largest trade surplus to the EU economy of any sector, some 78,9 billion euros in the EU-25 in 2004. It is therefore vital for the sector to remain competitive and flourishing, so that it can contribute as a motor of growth in the EU’s economy.
Mechanical Engineering is a very wide and diverse sector. The main sub-sectors as defined in the NACE nomenclature are:
- machinery and equipment (chapter 29 NACE Rev 1)
- machinery for the production and use of mechanical power, except aircraft, vehicle and cycle engines (chapter 29.1 NACE Rev 1)
- other general purpose machinery (chapter 29.2 NACE Rev 1)
- agricultural and forestry machinery (chapter 29.3 NACE Rev 1)
- machine tools (chapter 29.4 NACE Rev 1)
- other special purpose machinery (chapter 29.5 NACE Rev 1)
which cover an enormous array of machinery, such as lifting and handling equipment, machine tools, textile machines, agricultural machinery, construction equipment, transmission technology, compressors, pumps, heating ventilation and air conditioning equipment, combustion engines, windmills, etc.
The following chart (click to enlarge) gives an approximate breakdown of the importance of the main sectors of the industry, measured by production.
ORGALIME mechanical engineering industry
by sectors - 23 member countries
Production
Employment in the industry, notwithstanding the present lack of growth in the EU’s internal market, has remained relatively stable over the last 10 years: consistent, if moderate, long term growth in output, productivity improvements and a vigorous export performance on world markets lie at the root of this success.
The machinery and equipment industry registered an estimated production growth of 7.1 percent in 2006. Extra EU exports increased rather strongly by 13.1 percent, which positively contributed to the growth of the whole sector. Intra EU trade also developed very well in 2006 with a growth rate of 6.5 percent. All sub-sectors of the machinery industry are doing well at p resent, with the machine tools (Nace 294) and mechanical power machinery (Nace 291) performing particularly strongly.
The expansion of the sector is expected to only slow down gradually in 2007. Investment plans in the sector itself are less ambitious in 2007 than they were in 2006. Many key customers and key industries which are impor tant for the sector have already heavily invested in the past two years. Therefore the production of the European machinery sector is forecast to expand slightly less in 2007 by a rate of 4.5 percent. It should be noted that this figure neverthe less is almost twice as high as the average growth rate of the past ten years.
MELC and its subgroup THG has continued to actively defend the interests of the mechanical engineering industry both at the level of general industrial policy and other specific issues. This work is carried out through regular contacts with the officials of the EU institutions, in particular the Commission, the Council (working groups) and the European Parliament. Much of this work is carried out in close collaboration with European sector associations in the branch so as to reinforce the industry representation on issues of common interest.
Among the key policy actions being pursued by MELC is work on reinforcing the attention of policymakers towards Mechanical Engineering, with the aim of highlighting those areas needed to ensure the continuing competitiveness of this branch of our industry, which is today a world leader.
As one of the actions aimed at reinforcing the attention of policymakers towards mechanical engineering it is worthwhile mentioning the Opinion on Industrial Change on the Mechanical Engineering Sector published by the European Economic and Social Committee on 11 May 2005. The rapporteur was Mr. van Iersel and the co-rapporteur was Mr. Castañeda, Managing Director of SERCOBE and one of the MELC Directors. For the different language versions of the opinion see here: Czech, Danish, Dutch, English, French, German, Greek, Estonian, Finnish, Hungarian, Italian, Latvian, Lithuanian, Polish, Portuguese, Slovak, Slovenian & Swedish.
Work carried out so far highlights a number of areas on which we believe we need to put more emphasis: research and innovation, investment promotion, market access and, above all, the framework conditions under which companies today have to operate in the EU. The issues of skills shortage, which is a growing problem, and the image of the mechanical engineering
industry, are also on the table.
At a regulatory level there are a number of key issues being managed either in THG or in specialised task forces or horizontal groups, including:
Operation of the internal market:
Health and safety legislation:
Environmental issues:
Mechanical Engineering Dialogue
MELC's aim is to promote the image of and develop relations for the EU's mechanical engineering industry at the European institution level. This is done both directly and in conjunction with European Sector Committees via an industrial dialogue with the Commission.
The Mechanical Engineering Dialogue's meetings provide a lively forum for a direct exchange of views between mechanical engineering industry representatives and the European Commission on a wide range of issues which affect manufacturers.
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