Orders for German manufacturers of PV components, machinery and equipment continue to look positive at the end of the third quarter.
According to a current business climate survey conducted by the German Engineering Federation (VDMA), 52% of the companies reported an improvement in their order situation compared to the same period last year. Approximately 46% report a similar level of incoming orders. Nevertheless, the economic drive for PV machinery has slowed significantly compared to spring. Participating companies reported a revenue increase of 17% for the current year. In spring, expectations had amounted to 27%.
"We had a great start into 2014, said Peter Fath, managing director of RCT Solutions GmbH and chairman of VDMA Photovoltaic Equipment, a division of the VDMA. "Turnover and incoming orders rose by 30% compared to last year. The tightening of anti-dumping levies on Chinese and Taiwanese solar products, however, has considerably slowed down the economic recovery of the industry."
However, positive signals are visible in the PV installation market. Leading market researchers forecast PV installations of up to 50 GW this year and are expecting the announcement of investment in new fabs and production lines soon.
"VDMA assumes that the gap between supply and demand will be closed by the end of 2014. This means increasing investment in modern equipment and technology at the beginning of 2015. From our point of view, the German PV machinery industry is optimally prepared for the emerging investment cycle," adds Florian Wessendorf, managing director of VDMA Photovoltaik Equipment.
Indeed, industry reps expect a revenue increase of more than 16% for the coming year.
Capacity utilization below plan, workforce reductions expected
In addition to low capacity utilization, workforce layoffs are a consequence of the current market weakness, according to the association. Some 53% of the companies report below average utilization, while 43% say they intend to reduce their personnel in the future.
PV equiopment manufacturers saw orders on hand settle at a level of 4.4 months at the end of the third quarter of 2014. By comparison, the entire machinery industry in Germany could reach 5.7 months in the same period.
The VDMA points out that in order to support their revenues, PV manufacturers are focusing on increasing efficiency in production, logistics and personnel as well as on increasing their own market share. Companies are making long-term investments in research and development and in increasing efficiency in an effort to boost competitiveness.
"Although we feel a cooling of the market environment at the moment, we remain optimistic with regard to the future," Fath adds. "All indicators suggest that the German PV machinery industry will keep its position as a driver for innovation and provider of solutions in photovoltaic production."
Currently, approximately 100 VDMA member companies are active in the photovoltaic sector. The VDMA represents more than 3,100 companies in the engineering industry, many of which are small and medium sized enterprises.