Machines and Engineering Industry Trends 2023

Global mechanical engineering output growth will slow down from 3% in 2022 to 1% in 2023, mainly due to subdued demand in advanced markets Machines and Engineering Industry Trends 2023 Growth slows amid subdued demand; opportunities will come from green and digital transitions Tighter financing conditions and increased borrowing costs are having a negative effect on capital expenditure, in particular in major buyer industries like construction and transport. Both sectors are highly cyclical and sensitive to financing costs. Backlogs of orders built up during the height of the pandemic should provide short-term support for production even in the context of weakening new orders. However, if industrial weakness persists, some of these longstanding orders are at risk of being cancelled. The ongoing shift towards electric vehicles will lead to changes in machinery supply to the automotive sector, with more emphasis on batteries and related electrical equipment. Demand for machinery to manufacture conventional powertrains will weaken.    Across all regions, we expect sector growth to decelerate in the long-term. This mainly affects Asia Pacific, where China’s pivot to a more services-oriented economy will reduce demand for capital goods.