Global Recovery Not Expected Until 2025

Worldwide profile machinery market, which experienced slight growth in 2023, is set to face serious stagnation in 2024, despite a slight increase in total market volume from EUR 1.02 billion to EUR 1.03 billion. The minimal growth is overshadowed by the challenging economic climate, driven by the war’s impact and inflationary pressures, leaving the market stuck in neutral. According to a recent study by Interconnection, a 3.3% global recovery isn’t anticipated until 2025, offering little immediate hope for the industry.

Soaring Prices Crush Investment Sentiment

The profile machinery sector, especially for profile bar machining centres, has been hit hard by rapidly rising prices, with some industry leaders hiking prices by 15% during 2022-2023. The sharp price increases have stalled demand, with profile bar machining centres still accounting for 47% of the total market value in 2023. Other segments, like cutting machinery (20%) and screwing and drilling machinery (just 2%), are faring even worse, facing anemic demand.

Despite Central Europe’s dominance, holding 26% of global market sales, the region is unlikely to experience any real recovery until 2025. Rampant inflation, high-interest rates, and a lack of governmental support have created a toxic investment environment across Europe, mirroring the situation in Germany.

Aluminium Takes Over as Other Materials Struggle to Compete

In 2023, aluminium machinery dominated the profile machinery market, accounting for 56% of global sales, and this trend shows no signs of slowing. With EUR 878.4 million in total sales across PVC, steel, and aluminium equipment, the aluminium segment continues to grow due to its superior material properties — lightweight, corrosion-resistant, and highly recyclable. Aluminium’s sustainability and versatility make it a top choice in construction, automotive, and aerospace industries, pushing its demand far ahead of competitors like PVC and steel.

The Americas are leading the charge, with 67% of the market dominated by aluminium machinery, while Europe maintains over 50%. PVC’s demand fluctuates with the construction industry, and steel machinery remains niche due to its heavier weight and lower recyclability, struggling to gain traction despite some companies investing in its future.

A Grim Outlook Until 2025

Despite minor growth in 2023 and 2024, the CAGR for profile machinery until 2027 is expected to hit 2.9%, with PVC machinery sales projected to reach EUR 404.5 million. Steel equipment remains a niche market, though some industry players are making small, forward-looking investments.

Aluminium’s continued dominance, driven by its widespread use and eco-friendly appeal, will keep it at the forefront of the market, securing over 50% of sales through 2025 and beyond. However, for the industry to truly break free from its stagnation, major economic shifts are required, alongside global recovery efforts expected in 2025.

Market Concentration Poses Challenges

The global profile machinery market remains highly concentrated, with just a handful of companies controlling most of the sales. European giants like Voilàp, FOM, Urban, Graf, Rotox, Schirmer, and Stürtz dominate, yet they reported a difficult 2023. The situation is mirrored outside Europe as well: Turkish companies Kaban, Murat, and Yilmaz are making moves into Latin America and Africa, while maintaining a strong grip in the Middle East. Meanwhile, APAC manufacturers like Tianchen and Parker are emerging as global forces after years of dominating their local markets.

The USA, typically a promising market, is also showing strength with local producers like Joseph and Pro-Line, though the current global climate has impacted even this market’s potential.

Conclusion

Despite 2023’s initial growth surge, the profile machinery market is in deep trouble. Spiraling costs, weak investment sentiment, and harsh economic conditions have left the sector on life support. Until 2025’s projected recovery, driven largely by aluminium demand, the market will remain in a holding pattern, with only slight incremental growth expected. The future of the industry depends on global economic stabilization — and time is running out.

20/03/2024

Copyright: Interconnection, free of charge for publication in the context of reporting on the study mentioned and IC Consulting.

<i>In 2018, the market for aluminum, PVC, and steel profiles machinery grew by 2.0% worldwide. Due to a slowdown in growth in Europe and the NAFTA region, rather moderate growth figures are expected to continue in the upcoming years. According to a new study by Interconnection Consulting, average annual growth is projected to be 1.9% up to 2021.</i>

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<b>Market Overview<b>

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The Asia-Pacific region recorded the highest growth last year, with a plus of 5.5%. The market for profiles machinery enjoyed high growth especially in China. Another growth market is Africa, which was able to increase its market performance by 4.8% last year, even though it remains the smallest submarket with a market volume of EUR 15.9 million. The other emerging markets, such as Latin America (-6.9%) and the Middle East (-5.7%), suffered a decline in foreign investments due to political risks and volatile currencies. Europe, the largest submarket for profiles machinery, managed a growth of 2.2% despite the Brexit crisis. The battered British market was more than compensated by positive developments in Eastern and Southern Europe. The NAFTA states achieved a growth of 2.4% in 2018. Yet in the US, as well, industry is expected to lose some of its momentum over the next few years, which will further curb growth rates.

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<b>Service Is Releasing<b>

With a volume of EUR 398.7 million, profile bar machining centers is the strongest segment on the market, followed by cutting and milling machines. Overall, the machines have a share of 68.2%. Within profiles machinery, the 3-4-axis profile machines account for the lion’s share, with a share of almost 50%. Services are becoming increasingly important, now occupying a market share of 12.1% on the world market. “Machinery maintenance and regular service is mandatory and causing this sector to grow in almost every region worldwide,” states Laszlo Barla, author of the study.

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<b>Eastern Europe on the Upswing <b>

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Aluminium profiles machinery reached a value of EUR 353.1 million in 2018 (+5.0%) and is expected to increase by 3.4% next year as well. The largest markets for aluminum profile machines are Central Europe and NAFTA. In this segment, Eastern Europe is the strongest growing region with an increase of 13.9%. Due to technological advances, Eastern Europe is shifting from simple activities such as cutting and milling to the more profitable profiles technology. The PVC profile processing market grew by 2.9% worldwide last year. The Asia-Pacific region achieved the largest growth, managing a plus of roughly 25%. One driving force is the Chinese window market as PVC windows are getting bigger in demand. The dominant countries in the production of profiles machinery are Germany and Italy. In the aluminum sector, it is chiefly Italian companies that dominate the market, whereas German firms dominate the PVC sector. The top 10 companies worldwide in the aluminum sector have a market share of 76.8%, while in the PVC sector the market concentration is not quite as high (49.5%).

<i>The European market for profiles machinery for PVC, aluminum, and steel managed a modest growth rate of 2.2% last year, with a market volume of EUR 505 million. High growth rates in Southern and Eastern Europe were able to compensate for the negative effects of Brexit.</i>

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Profiles machinery are mainly used in automotive and window production. Only in Eastern Europe is the market share of PVC just above that of aluminum profiles machinery. Steel, with low single-digit percentages, plays only a subordinate role in the overall market.

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<b>Automotive Industry Boosts Aluminum Sector in Germany and France</b>

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Central Europe (the DACH countries, the Benelux region, and France) recorded a growth of 3.1% in 2018, with a market volume of EUR 231 million. The strong automotive industry and the high-quality window market are the driving forces behind the bullish aluminum market for profiles machinery. On the other hand, the market is characterized by a cut-throat price war in the PVC window market, which also has a strong influence on profiles machinery investments, according to Laszlo Barla, author of the study. In terms of machine types, the 3-4-axis profile machine segment leads the pack with a market volume of EUR 51.4 million. However, growth rates (+1.7%) in this product group are low. For this reason, the 5-axis machines may soon take the lead (+4.6%). Between aluminum and PVC, aluminum has a clear lead (56.9%) over PVC (41.5%).

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<b>Southern Europe in the Fast Lane<b>

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Southern Europe (Italy, Spain, Portugal, and the Balkan nations) recorded a market growth of 5.2% with a market volume of EUR 91.5 million. In addition to the Turin/Piedmont region with its automotive industry, the Italian window market is also experiencing a renaissance. In Spain and Italy, it is metal windows that are generating the largest sales. However, growth rates will decline somewhat over the next few years due to more moderate overall economic drive. Northern Europe (the UK, Ireland, Scandinavia) has lost its footing on account of the Brexit crisis (-4.6%). The output in the UK automotive industry declined by 11% in the first half of 2018. There is hope that the final Brexit agreement will instill a renewed sense of economic reliability. By contrast, the market in Scandinavia is developing steadily. The aluminum-to-PVC ratio is 55.9% to 42.9%. Eastern Europe recorded a market growth of 3.7% with a 20% share of the European market. The Visegrad states are the ones experiencing an economic boom. There are still a large number of small window producers in Eastern Europe looking for simple tools because of cheap labor. This demand is often met by cheap Turkish market participants.

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<b>German and Italian Manufacturers Dominate<b>

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Overall, the industry is dominated by German and Italian producers. Italian manufacturers, led by Voiláp and the FOM Group, are focused on the metal segment. German manufacturers such as URBAN and Rotox dominate the market for PVC profile machines.

The global market for profile machines for window and door production was €896.9 million in 2020, 0.7% lower than in 2019. This market experienced strong growth in the last few years before the pandemic and was not hit as hard as other sectors. The market will also catch up quickly once the crisis is over, as a new study by Interconnection Consulting shows. 

Europe Leads the Way out of the Crisis

The global market for profile machines for window and door production is linked to the sales situation and the development of the window market. In Europe, the CEE region has seen itself as a motor for the industry in recent years. The region is responsible for 30.1% of the global output of profile machines. The growth of the industry in this region was up to ten per cent in the years before Corona, also due to the demand for PVC machines from Germany. In 2019, the CEE region displayed a growth of around seven per cent. While the outlook for the European markets is good even after the crisis with good expected growth rates, the other side of the Atlantic is in for less rosy times. Growth in the NAFTA region as well as in Latin America will be less dynamic than in Europe. In Asia, China is the clear market leader with a share of over 70 per cent. The young market for profile machines in Asia is still dominated by local manufacturers. Growth rates in the Asia-Pacific region were 7.2% in 2019, the highest in the world. The market there benefits not only from cheaper production costs, but also from rising quality standards and network effects between window and profile manufacturers. Of the three machine types (PVC, aluminium, steel), PVC has the greatest growth potential for the future and the largest market share with over 60 percent. One driver for PVC profile machines is the Chinese window market, where PVC is the most popular window frame material.

New Global Players from China

The market for profile machines is highly concentrated. The top ten companies worldwide occupy more than 50 percent (56.9%) of the world market. The market is dominated by European companies and here again mainly by German companies like Urban, Rotox, Schirmer and Italian companies like Voilàp, FOM Group or Graf Synergy, the Italian PVC specialist. Apart from other big European players, there are only US companies and Turkish manufacturers that are involved in the world market. Also in China, after dominating their local market, some manufacturers are trying to jump into the global market like Zhongwang or Xingfa, which will make competition tougher worldwide in the future.