At the Economic Committee meeting during its General Assembly in Basel, hosted by SWISSMEM and CECIMO, the European Association of Manufacturing Technologies evaluated the distinct hurdles facing the sector in 2026. The committee analysed upcoming risks and opportunities in an industrial landscape heavily influenced by ongoing economic and political volatility.
Current economic climate and projections
The European machine tool industry navigated a gruelling economic climate throughout 2025, where CECIMO businesses faced intense global rivalry alongside sluggish demand. This combination caused European machine tool manufacturing to contract by an estimated 6.6% year-on-year, dropping to 23.5 billion euros and signalling that the industrial downturn has yet to bottom out.
This downturn is actively reshaping Europe’s standing on the international stage. In 2025, the region’s share fell to approximately 30.8% of worldwide machine tool production, which represents a drop of nearly two percentage points from the previous year. When compared to the 33.4% share recorded in 2023, Europe has shed nearly three percentage points of its global market footprint in just twenty-four months, indicating a steady erosion of its traditional industrial dominance.
Domestic market activity similarly cooled, with consumption slipping by 3.7% compared to 2024 due to quieter demand across European nations. Trade volumes mirrored this downward trend, as exports from European machine tool manufacturers shrank by 8.8% while imports contracted by 4.2%. Outside of Europe, the primary export markets remain the United States, China, and India, whereas Japan, China, and South Korea hold their positions as the leading import suppliers to the European market.
Ultimately, these metrics show an industry constrained by a harsh macroeconomic environment. A combination of deceleration in investments, ongoing instability, geopolitical frictions, and cooling momentum in both domestic and global markets suppressed machine tool demand and strained business operations for CECIMO members. A parallel trend is visible in order books across CECIMO8 countries, where domestic orders dropped by roughly 1.7% in 2025 to mark a three-year streak of contraction, while foreign orders conversely rose by 1.2% over the same timeframe, securing the first period of growth following a two-year decline.
Looking ahead to 2026
CECIMO’s forecasts for 2026 indicate a minor rebound after back-to-back years of falling production and consumption. A projected rise in manufacturing and consumption levels across European nations points toward a potential stabilisation, while overall order volumes for CECIMO8 nations are also expected to see an uptick. However, this positive turn remains highly vulnerable to external disruptions and broader market shifts, meaning it represents a transitional phase rather than a robust, definitive recovery.
The industry must still navigate a volatile landscape characterised by geopolitical conflicts, supply chain risks, potential tariff implementations, energy price instability, and sluggish capital investment in major European economies. Because European machine tool producers rely heavily on global trade and capital expenditure cycles, any escalation in these risk factors could easily stifle the projected turnaround.
On a more positive note, CECIMO highlights potential tailwinds from public funding and strategic sectors. Increased activity in defence, aerospace, electrification, AI technologies, and high-tech engineering could bolster demand for advanced, high-precision manufacturing systems, though this depends entirely on swift project execution and avoiding delays.
Achieving a steady trading environment, revitalising industrial investments, and deploying supportive policy frameworks will be vital to sparking a gradual turnaround for Europe’s machine tool sector. Without these catalysts, European manufacturers risk losing more ground to global rivals who are aggressively scaling up their industrial output.
Leadership perspective
“The current data proves that Europe’s status as an industrial leader is not guaranteed. Machine tool manufacturers across the continent are operating under tough conditions, defined by weakening demand, global volatility, and intensifying competition from abroad. While strategic sectors offer a silver lining, Europe urgently requires a predictable policy environment, robust industrial investment, and the rapid execution of initiatives designed to champion advanced manufacturing,” stated François Duval, former President of CECIMO.
