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Lockdown length will determine future of UK machine tools

06 May, 2020

The latest economic forecast from the MTA (Manufacturing Technologies Association) predicts that the UK market for machine tools will fall by 21% in 2020 before recovering by 23% in 2021. But the MTA warns that its Spring update forecast – produced for it by Oxford Economics (OE) – makes assumptions about the length of the lockdown period and the shape of the subsequent recovery.

It assumes that lockdown in the UK starts to be eased in mid-May and is then followed by an acceleration in activity in the second half of 2020, leading to the rebound in 2021. However, the MTA cautions, “the risks are almost entirely on the downside, and relate mainly to the timing of the end of lockdown and the pace of the recovery”.

If the lockdown lasts longer, OE expect the UK’s GDP to drop by 10% during 2020 before returning to 2.8% growth in 2021, negatively affecting the MTA forecasts. “On top of this,” the MTA adds, “the possibility of the UK’s transition period from Brexit ending on 31 December without a wide-ranging trade deal with the EU remains a significant risk to the forecast for 2021 and beyond”.

The Spring 2020 edition of the Global Machine Tool Forecast predicts that world demand for machine tools will plunge by 28% in 2020, with a strong recovery of 33% in 2021, driven mainly by demand from Asia. In Europe, where consumption fell by around 2.5% in 2019, a further drop of 25% is predicted for 2020, before rebounding by 19% in 2021, still leaving demand below 2019 levels.

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