With a strong EU single market behind it, the mechanical and plant engineering industry in Europe can survive the increasingly tough global competition and drive innovation forward – if the relief promised by the EU comes and companies drive their own transformation forward.

Europe’s mechanical engineering industry can also hold its own in an increasingly tough global competitive environment if companies transform themselves, form European networks – and if they are supported by the EU with the necessary economic policy reforms. “Despite all the challenges, our industry remains resilient. If we work together, invest in innovation and use the strength of the EU single market, we can overcome these uncertain times and shape a successful future for the European mechanical and plant engineering industry,” said VDMA President Bertram Kawlath at the start of the VDMA European Summit. However, as production in Europe has become “increasingly complicated, cumbersome and expensive” in recent years, the EU Commission must continue to consistently pursue the path it has now embarked on to noticeably reduce the burden on industry, he demanded. The VDMA European Summit is taking place in Amsterdam this year and will bring together around 250 high-ranking representatives of the mechanical and plant engineering industry from all over Europe.

After all, EU decision-makers have recognized that Europe needs a strong industrial base and have therefore made Europe’s competitiveness a top political priority, praised Kawlath: “The initial proposals to simplify sustainability reporting, due diligence in the supply chain and the carbon border adjustment mechanism CBAM are very promising.” It is now crucial that these so-called omnibus proposals remain unchanged in the legislative process. “Then we will see a considerable reduction in the administrative burden,” said the VDMA President.

EU single market as an important trading platform
The latest statistics show just how important intra-European trade in mechanical and plant engineering is for the continent’s strength. In the first eleven months of 2024, EU machinery exports reached a total value of 543 billion euros, around half of which (272 billion euros) went to other EU countries. “This illustrates the importance of the EU single market as an important trading platform for our industry,” said Kawlath. Industry turnover in the European mechanical and plant engineering sector is estimated at EUR 860 billion in 2024 (down 6% on the previous year) – that is around 27% of the global machinery market. The industry is expecting another difficult year in 2025. Due to the many global trade barriers and great uncertainty among customers, companies must expect investment levels to remain weak.

Leading industrial change with artificial intelligence
Kawlath warned that it is therefore all the more important for companies to push ahead with the necessary reforms. “On the one hand, companies need to adapt by diversifying their supplier networks, investing in regional production centers and making their logistics fail-safe. On the other hand, the pursuit of regionalization opens new doors for greater European cooperation, more innovation and improved competitiveness on the global stage.” Companies must also open up to the increasing use of artificial intelligence in production and service.

“AI improves efficiency, reduces downtime and supports smarter decisions through applications such as predictive maintenance, quality control and supply chain optimization. Machine learning achieves greater adaptability, helping companies to optimize production and minimize waste,” said the VDMA President. The ethical issues associated with artificial intelligence must also be taken into account. “However, by using AI responsibly, European manufacturers can not only remain competitive, but also lead the next wave of industrial change,” concluded Kawlath.