Sercobe • the Spanish Industry of Capital Goods 2009
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THE SPANISH INDUSTRY OF CAPITAL GOODS 2009 Rabigh refinery for Saudi Aramco and Sumitomo in Saudi Arabia INTRODUCTION 4 I.THE SPANISH INDUSTRY OF CAPITAL GOODS 2009 7 1. GENERAL CONTEXT 8 1.1.The International economy 8 The Year 2009 8 Forecasts 2010 9 1.2.The Spanish economy 9 The Year 2009 9 Forecasts 2010 14 1.3.The Capital Goods Industry in Europe 16 The Year 2009 17 Forecasts 2010 17 2.THE CAPITAL GOODS INDUSTRY IN SPAIN 18 2.1.The Year 2009 and Forecasts 2010 18 2.2. Detailed examination of the main variables and their evolution according to industrial branches and size of companies 24 2.2.1.Turnover 24 2.2.2. New Contracts 25 2.2.3. Profit and loss account 26 2.2.4. Employment 28 2.2.5. Personnel Expenses and Productivity 28 2.2.6.Foreign Trade 30 Breakdown according to specialisations 33 Breakdown of foreign trade by geo-economic area 36 Scope, Methodology and Sources 40 II. SERCOBE, NATIONAL ASSOCIATION OF MANUFACTURERS OF CAPITAL GOODS 43 1. SERCOBE IS 44 2. STRUCTURE AND ORGANISATION 45 3. ACTIVITIES OF SERCOBE IN 2009 47 List of Sercobe Associates 65 INTRODUCTION In this traditional Annual Report, SERCOBE presents the results of the analysis conducted on the situation and perspective of the Spanish Industry of Capital Goods in the year 2009. The objective of both analyses, that are annually performed, is to know in depth the evolution of our sector.They are based on the surveys conducted among the most representative companies according to their dimension and specialisation, as well as on the data available at different departments of the Spanish Public Administration, the European Union and the European Associations of the Sector. We are trying with such knowledge to orient and to adapt our activities to the needs of the enterprises, therefore fulfilling the statutory aims of providing support and stimulus to the Spanish Industry of Capital Goods, the representation of which we are honoured in receiving. In the second part of this publication, we also give a tight synthesis of such activities and the work developed. Within an international context, and European one in particular, with serious difficulties, to which the singularities of the Spanish economy are added, the Industry of Capital Goods has experienced a year 2009 of severe contraction, much deeper than anticipated one year ago.This has placed the level of activity in values similar to those of the year 2004, being its evolution in accordance with the one experienced by our colleagues of this specialisation in Europe. Turnover is placed in the range of 38,800 million Euros, with a serious reduction of –20.0% and it continues representing more than 20% of the Manufacturing Industry. Employment has suffered by this difficult situation and accuses a reduction of –6.8%, especially painful inasmuch as it supposes a loss of jobs of considerable technical training and, therefore, of complex recovery. The Sector occupies 190,000 people directly and more than twice this number in suppliers and through induced use. The variations of Turnover and Employment lead to a reduction of the Gross Productivity in the range of –5% that must be corrected as soon as possible, to the benefit of the general competitiveness of the economy. The strong contraction of the Demand has forced to a reduction of the Sale Prices, considered for the sector altogether in –0.7%. The fall of the Corporate Results considered in –26.4% and the diminution of the Own Investment by –23.2% have been inevitable consequence of that. It is excluded nevertheless from this result the investment performed in personnel training and innovation that have practically stayed as an inexcusable reaction to secure the development of the enterprises in the future. In a praiseworthy joint effort of the social agents of the sector to defend the viability of the companies and to contain the loss of jobs, the Personnel Expenses have undergone an adjustment evaluated in –2%. Exports are vital for this Industrial Sector that has devoted to the foreign markets 61% of its production. They have lost –16% following the reduction of international trade. Even so, they represent 15% of the total Spanish Exports of goods, being the main exporting sector.The Foreign Trade Deficit of the Sector represents a value of the order of 27% of the total Deficit of Goods. On the other hand, the Imports of Capital Goods present a fall of –34.1% and the combination of the magnitudes of the sector evidences a deep retraction of the Market, estimated in –32%, in accordance with the setback undergone by the volume of New Contracts, that according to the estimates of the companies has dropped –27% and places the use of the Productive Capacity in 73%. 4 SERCOBE / THE SPANISH INDUSTRY OF CAPITAL GOODS 2009 In summary, the year 2009 has constituted a hard test and only in its last months it seems to attenuate the steep falls undergone by the magnitudes object of the examination. Within a generalized scene of crisis that affects in a similar way to all the specialisations of the Sector, the most serious problems of survival affect the smaller companies, with a high number of cessations of activity. On the other hand, a better situation is observed in addition to more capacity to confront the crisis in those companies of a larger size and in those acting not only as manufacturers of equipment, but also as providers of technological services bound to contracting complete plants and facilities.They can also obtain access to the emergent international markets in which the demand has been maintained. The year 2010 and facing the future The year begins with some data that seem to indicate a certain recovery of the real economy in the productive sectors and, in particular, in the Manufacturing Industry.This industry fights to overcome a context in which the crisis of credits is added to the lack of corporate expectations that animates investment. The impression felt by the Spanish Industry of Capital Goods is that it is leaving without a doubt a difficult situation concerning the level of the order portfolio, but that in the first quarter posts increases in exports supported by the recovery of the external demand. It is possible, therefore, to trust in the recovery of our Sector, which has known how to face previously serious difficulties. It has a proven capacity of opening new markets, progressing in quality and technological innovation of its products. Recovery that, evidently, parts of a very low level, will be gradual with probable hesitations and that it should have to consolidate in the period 2011-2012. The Spanish Industry of Capital Goods expects in 2010 the maintenance of this level of activity and, in a very short advance, if any, that would allow stopping at least the painful losses of employment. It should be explicitly mentioned the reaction of the European mainframe organization, ORGALIME that groups the national associations of the Engineering Industry, of which SERCOBE is an active part, that in close collaboration with the institutions of the EU, has designed a complete plan of specific initiatives of industrial policy to re-launch our Sector, in a new context of sustainable economy based on knowledge. The so wished recovery will depend largely upon the effective and coordinated start up of such initiatives at the level of all the Member States. It will depend as well of the efficiency obtained in selecting the moments in which the public resources available are put obligatorily under a serious containment and, therefore, have to be allocated with maximum responsibility. Gratitude We express our gratitude to the associated companies, for their trust in this Association and to all participating companies, which have enabled this analysis of the sector providing their data and qualitative estimates.We also thank the Ministry of Economy and Finance and the Ministry of Industry, Tourism and Commerce, with which SERCOBE is in close collaboration, as well as the Institute of Foreign Trade ICEX for its support and sponsorship of this publication. SERCOBE / THE SPANISH INDUSTRY OF CAPITAL GOODS 2009 5 Integrated photovoltaic transformer substation THE SPANISH INDUSTRY I OF CAPITAL GOODS 2009 TIME system for the inspection of PWR reactor pressure High power drives vessel for nuclear plants, China application 1. GENERAL CONTEXT 1.1.THE INTERNATIONAL ECONOMY(1) High values of the Public Deficit above 3% of GDP are maintained in all the countries. Germany presents the less negative number, while The Year 2009 the United Kingdom and USA post the worse values. Slight modifications something more optimistic than in the previous All the values of Public Debt exceed 60% of GDP,and Japan, in report, especially strong in the emergent economies. addition to USA, marks to the highest percentage. GDP maintains negative rates in all the countries of the table with The Unemployment Rates stay in the high values foreseen, in the maximum values in Germany, United Kingdom and Japan. neighbourhood of 9%, being Japan and Germany the lowest. Domestic Demand presents the same perspective, with reductions Only Japan has negative rates in Prices, and the United Kingdom for the whole that emphasize in the United Kingdom and USA. shows the highest rate. In the Current Account Balance of Payments (% of GDP), positive Strong setbacks appear in Industrial Production, with negative rates values appear only in Germany and Japan. that exceed 10% except in USA. GDP Domestic Balance of Payments Public Public Industrial CPI Unemployment Demand c.a.% GDP Deficit % GDP Debt % GDP Production Rate 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 Germany –4.9 1.2 –1.7 0.4 5.0 4.8 –3.3 –5.0 73.2 78.8 –16.8 6.3 0.9 1.3 7.5 7.8 France –2.5 1.3 –2.4 1.2 –2.9 –3.3 –7.5 –8.0 77.6 83.6 –12.1 4.0 1.6 1.4 9.5 10.2 EMU –4.1 0.9 –3.3 0.1 –0.6 –0.4 –6.3 –6.6 78.7 84.7 –15.0 4.2 1.3 1.5 9.4 10.3 U.