Members of the German Large Plant Manufacturer´s Group (AGAB) booked orders worth 26.6 billion euros in the period July 2008 to June 2009. That figure is down by 19 % compared to the record order intake level in 2008 (32.8 billion euros). The sectors of the industry that service the basic raw materials market were particularly affected by the falloff in demand. “The fallout of the financial crisis has now reached the industrial plant engineering sector,” summarized AGAB spokesperson Dieter Rosenthal from SMS Siemag the current results.
“In the second quarter alone, order intake by member companies was down by 54 %, which is the largest decline we have seen in ages.” The falloff in demand is not necessarily a reason for concern. However, misguided intervention in financial markets could hamper future industrial investment. “Large-scale investment projects costing several hundreds of million euros to extract and process raw materials, generate energy or produce goods are a major economic factor. They make an essential contribution to sustained development of the world economy, and they lay the foundation for progress and affluence. Mega projects are currentlybeing shelved because it is difficult to raise financing. These projects take years to complete, and it will not be possible to make up for lost time in the short term,” explained Rosenthal. Therefore, a lot depends on the success of the G-20 meeting in Pittsburgh on September 24th to 25th. Rosenthal expressed the following view: “The plant engineering sector welcomes the determination of the political community to enhance the resilience of the world financial system. However, it is absolutely vital that we do not make the mistake of pursuing a lop-sided regulation agenda. In the current situation, it is essential to restore confidence in capital markets and sources of refinancing to ensure the long-term availability of financing for large investment projects.”
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