Electric motors, generators and transformers: more disrupted dynamics expected from world trade in the second half of 2023

For one of the most recently dynamic sectors of the Electrical Engineering industry, the prospects for the second part of the year appear less favourable

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Slowdown Conjuncture Check performance Foreign markets International marketing High-tech Global economic trends

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The performances of the 1st half of 2023

Within the electrotechnical industry, the sector of electric motors, generators and transformers1 has been highlighting for some time particularly favorable growth performance in world exports.
In particular, as highlighted in the graph below, world exports of electric motors, generators and transformers are showing trend growth in the measurement at constant prices for eleven consecutive quarters.

In the first half of 2023 global exports of electric motors, generators and transformers, measured at constant prices (net of inflation and exchange rate dynamics), continued to show double-digit percentage growth rates (+11.4%), decidedly more dynamic than all other electrotechnical products ( +1.8%).
Compared to pre-pandemic levels (2019), in the last period considered the global sales of the sector - when measured at constant prices - stood at levels more than 20 percent higher, compared to +14.4% for all other electrotechnical products.

Preliminary estimates for the 2023 final balance

The performances of the main world markets

In the first half of 2023 over 63% of international markets showed positive dynamics in the measurement of global exports to them at constant prices intended; this percentage rises to over 70% when measured in euro values.

The widespread growth of the sector's markets in the first half of 2023 will, however, tend to give way to more differentiated dynamics in the second part of the year

In the second half of the year, according to the ExportPlanning's pre-estimates2, a significant slowdown is expected in the growth of the sector's global exports in euro values (with a trend decline of close to 9% in the second half of the year), leading to a growth in the share of world markets at the end of the year to fall to 42 percent.

The more contrasting picture of the second part of the year will lead, with reference to the main 20 world markets by value of imports, to the following different final trends for 2023:
  • significantly positive contributions from imports of the sector for Netherlands (+4.3 billion euros compared to 2022, equal to +46.1 percent), Germany (+3.9 Bn €, corresponding to a +22.9%), United States (+1.7 Bn €), Austria (+1.1 Bn €, equal to +35.1 percent) and Italy (+1 Bn €, equal to +17.4 percent);
  • negative contributions, however, from imports of electric motors, generators and transformers for Hong Kong (-659 million euros compared to to 2022), Taiwan (-279 M €), China (-261 M €), Canada (-230 M €) and Japan (-123 M €).
Imports from the world of electric motors, generators and transformers
Levels (Bn €) % Changes
Market 2019 2023E 2022/2019 2023E/2022
United States 22.8 36.4 +52.2 + 4.8
Germany 11.5 21.1 +49.1 +22.9
Netherlands 4.9 13.6 +90.6 +46.1
China 13.4 12.1 - 8.1 - 2.1
Mexico 7.4 8.2 +11.5 - 0.9
Italy 3.3 6.9 +78.8 +17.4
France 3.9 6.3 +41.2 +13.6
United Kingdom 3.9 6.1 +37.9 +15.1
Hong Kong 6.8 6.1 - 0.3 - 9.8
Japan 4.6 6.0 +31.7 - 2.0
Canada 3.7 5.0 +40.7 - 4.4
Czech Republic 2.0 4.3 +82.1 +18.3
Spain 2.0 4.2 +82.0 +12.0
Poland 2.2 4.1 +75.4 + 5.4
Austria 1.8 4.1 +65.1 +35.1
India 2.4 3.6 +45.2 + 0.8
Taiwan 2.3 3.4 +56.8 - 7.6
Vietnam 2.7 3.2 +18.4 - 1.3
Turkey 2.0 3.2 +44.1 +11.1
Belgium 1.9 2.9 +32.1 +11.5
Source: ExportPlanning-Market Insights

The performances of the main global competitors

In the first half of 2023 over 74% of exporting countries in the sector showed positive dynamics in the measurement of their exports at constant prices ; this percentage rises to over 77% when measured in euro values.

In the second half of the year, corresponding to the expected slowdown in growth, the share of growing global competitors will ultimately decline per year at 48 percent.

The more contrasting picture of the second part of the year will lead, with reference to the main 20 global competitor countries in terms of value of exports in the sector, to the following different final trends for 2023:
  • particularly positive growth performance for Netherlands (+3.1 billion euros compared to 2022, equal to +41.4 percent), China (+2.9 Bn €), Germany (+2.7 Bn €), United States (+1.9 Bn €, equal to +18.2 percent), Mexico (+1 Bn €), Poland (+963 million euros, equal to +30.6 percent), Spain (+939 M €, equal to +33.2 percent) and Italy (+725 M €);
  • negative performance, however, for numerous Asian competitors, including Thailand (-1.5 billion euros compared to 2022, equal to -32.5, thus interrupting the significant progress of the 2020-2022 period), Hong Kong (-724 M €), Japan (-557 M €), Vietnam (-451 M €, also in this case interrupting the excellent trend of the previous three-year period) and Taiwan (-148 M €).
Exports to the world of electric motors, generators and transformers
Levels (Bn €) % Changes
Competitor 2019 2023E 2022/2019 2023E/2022
China 36.2 65.0 +71.4 + 4.7
Germany 17.7 24.0 +20.6 +12.6
United States 9.1 12.5 +17.0 +18.2
Netherlands 5.0 10.6 +50.7 +41.4
Mexico 5.5 9.4 +52.2 +12.2
Japan 6.5 7.5 +23.7 - 6.9
Hong Kong 7.8 7.4 + 3.3 - 9.0
Italy 4.5 7.0 +40.6 +11.5
Vietnam 2.3 6.7 +217 - 6.3
France 2.8 4.7 +40.8 + 6.6
Hungary 2.8 4.2 +30.2 +17.8
Austria 1.6 2.1 +12.5 +14.6
Poland 2.2 4.1 +45.7 +30.6
Czech Republic 1.9 4.1 +81.3 +20.7
Spain 2.3 3.8 +21.1 +33.2
Taiwan 2.1 3.6 +77.5 - 3.9
India 2.3 3.6 +59.5 + 0.6
Denmark 4.0 3.2 -37.0 +25.0
Thailand 2.2 3.0 +106 -32.5
United Kingdom 2.6 3.0 +11.4 + 3.4
Source: ExportPlanning-Market Insights

Conclusions

After a period, lasting almost 4 years, of trend growth in world exports - measured at constant prices (i.e. net of inflation and currency changes) of electric motors, generators and transformers, the ExportPlanning calculations relating to the second half of the current year report a significant slowdown in the second half of 2023.
In a context made more uncertain by this slowdown, rather differentiated performances are estimated at the end of the year both at the level of international markets and with regard to the main competitor countries in the sector.

The need for exporting companies to monitor
the performance of competing markets and countries
for their specific business area

For exporting companies in the sector (accustomed in recent years to a favorable demand context), it now appears strategic, in the face of heightened conditions of uncertainty, to be able to identify the international markets with the greatest growth potential, on which to focus its marketing and commercial development actions, and to adequately evaluate its performances, based on the results estimated for the various competing countries present in the international arena.

Thanks to the new series of services Market Insights, ExportPlanning intends to support the market portfolio choices of exporting companies.

1) For a description of the products included therein, see the related sector profile.
2) The 2023 pre-estimate is performed using suitable nowcasting techniques, which allow for the elaboration of estimates on the evolution of trade flows. To do this, the technique put in place by the ExportPlanning experience is that of the 12-term product-specific and country-specific ARIMA forecasting models, detailed at 6-digit Harmonized System product code and declaring country, which make it possible to make very reliable short-term forecasts, based on a historical series already acquired for the first part of the year in course.