Muted optimism at Hanover trade fair | Business| Economy and finance news from a German perspective | DW | 09.04.2013
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Muted optimism at Hanover trade fair

The Hannover Messe trade show is the world's largest showcase for industry, as well as an important economic indicator. This year, the mood has been reserved as the economic crisis takes its toll.

Red trade fair flag blowing in the wind

Hope is the motto at the Hanover trade fair

Optimism is typically the order of the day at trade fairs, even more so at the largest industrial trade fair in the world. But like the seemingly eternal winter that has dominated Europe this year so far, the mood at the Hannover Messe trade fair is overwhelmingly grey.

And like the weather, the future of the economic climate has become difficult to predict, given current economic and political instability. Despite all this, the powerful German industrial association BDI is counting on economic growth of 0.8 percent this year.

Complex situation

As Germany is considered Europe's economic motor, this predicted level of growth should in fact be far higher. "That's right - we can, should and must achieve more," BDI head Ulrich Grillo told DW.

Grillo admits there are risks - "We'll only manage it if we don't have any crises" - the euro crisis has to be kept in check and energy prices must remain manageable. And above all, "industry should be supported and not further burdened" - that's the only way to ensure growth.

There was plenty of hope in the speeches and conversations on the first day of the fair. The German engineering and machine manufacturing sector, darling of industry on the one hand and job motor on the other, has so far endured the economic crisis relatively well, profiting from healthy order-books.

But it's currently suffering from a lack of new orders, particularly from the domestic market. So, now, it's all a matter of hope.

Thomas Lindner, president of the German machine manufacturing association VDMA, used a sports metaphor: "It's like ski jumping: You have to gain momentum before you jump."

Lindner expects that the situation will improve over the 3rd and 4th quarters, but he remains cautious: "The situation is currently very complex and lacks clarity. However, that's no excuse for pessimism." That's apparently why the VDMA is sticking to its prediction of 2 percent growth in machine manufacturing.

Pioneering Industry 4.0

The electrical sector had a better start to the new year. Now, it's banking on the increased networking of industrial facilities, something trade fair sponsors call "integrated industry."

Friedhelm Loh, head of the electrical industry trade association ZVEI, pointed to past economic success in that field in Germany. This was due to the fact that "we were technologically quicker and better," he said. But now, German manufacturers will have to prove they are up to the task of leading the next stage of industrial development.

And this will have to go better than it did in the 1970s. "We were aware of the concept of computer-integrated manufacturing, but didn't get it quite right," Loh said. Today, however, information technology prerequisites are substantially better, he said. "So I'm optimistic, but one has to be realistic and say: it will take some time."

Experts estimate that so-called Industry 4.0, which refers to a network of self-controlling, "smart" manufacturing systems, won't become the standard until at least 2025. Norms and standards are still lacking, while numerous security issues still need to be resolved.

Eberhard Veit, head of the automation firm Festo, said that all of this can only be solved through broad cooperation. "Industry 4.0 doesn't mean just cooperation between complementary suppliers, it also has to involve universities and companies like Festo - and that worldwide," Veit said.

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He points to Industry 4.0 clusters which have been set up in Germany: "Such cooperation is an advantage which is not so easily found elsewhere - not even in Asia, where they don't have such clusters."

No fear of China

All the same, machine manufacturers in China are making up lost ground. But that shouldn't worry German producers, said Rainer Hundsdörfer, head of ebm-papst, the global market leader in industrial fan production.

"Not fear, rather respect," Hundsdörfer said of Chinese manufacturers. "We must take our competitors seriously, wherever they are in the world." German producers could never be cheaper than the competition, nor would they seek to be, Hundsdörfer said. "But we can always try to be better," he added, particularly with regard to energy and resource efficiency.

And just how far along the Chinese are, one can see quite well at the Hanover Fair - with more than 700 companies, they make up the largest foreign group of exhibitors.

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