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Outlook: What does the CNC industry expect in 2023?

Pandemic, Ukraine war, inflation and exploding energy costs: everything can only get better in the new year 2023, right? Find out in this article what the CNC industry can expect in the coming year, what trends are emerging in manufacturing and how companies can address the challenges of the future.

2023 Trends: Focus on efficiency, sustainability and the cloud

Research and consulting firm Gartner has forecast some trends for 2023 that we believe will have a direct impact on the CNC industry. Probably the most important trend in the coming year will be the cloud. The focus is on industrial cloud platforms, which are perfectly tailored to the respective industry segments thanks to their modular design and which offer companies direct added value. Software-as-a-Service, Platform-as-a-Service and Infrastructure-as-a-Service: Gartner expects that more than 50% of all companies will use industry-specific cloud services by 2027. Not only in the cloud, but in general, data will become the new gold of the CNC manufacturers in 2023. By collecting, extracting, merging, transforming and analysing data from different sources, the "digital factory" is becoming increasingly more efficient. With Business Intelligence Service, processes become more transparent and controllable – and strategic business decisions are even more data-driven.

On the other hand, a completely different trend, which has just been reported by the VDMA, is refreshingly "analogue". After almost three years of forced breaks, 2023 will become a real "trade fair year". The German trade fair year will begin in March 2023 with Intec in Leipzig, and the Moulding Expo heralds the start of the summer, culminating in EMO in September. 2023 will be rounded off by Formnext in November. At all trade fairs, operators and exhibitors are expecting significant growth, both in the number of visitors and in sales.

Technical innovations 2023

As in previous years, the digitisation of production will continue in 2023. Here, too, it is primarily measures to increase efficiency and process control that will be implemented in the companies. The IoT already enables decentralised condition monitoring with edge devices via SCADA systems – in the near future, these approaches will be further expanded by predictive maintenance. AI (artificial intelligence) and machine learning in particular are spreading rapidly in the production plants – including urgently needed, updated trust and security management. This must implement new functions to ensure reliability, security, trustworthiness and data protection along the digital manufacturing line.

The market situation

The VDMA chief economist Ralph Wiechers sums up 2023 as follows: "The wind is blowing in the face of the global economy and thus in the face of machine and plant construction." While the German mechanical engineers still recorded a small growth in 2022, a significant decline of 2% is to be expected next year. The weakness is mainly attributed to lower economic growth in China and the war in Ukraine. The high inflation and interest rate increases on the part of the central banks are also causing a slump in investment, especially in new business. Experts in Germany in particular expect a temporary recession in the winter of 2022 and in the spring of 2023 – triggered by the gas and electricity crisis, which will continue to weigh heavily on companies and consumers. But there is also something positive to report: there are no signs that jobs are being cut in the manufacturing industry on a large scale.

Problems and challenges

The exorbitant prices for energy are one of the biggest challenges expected in 2023. 70 cents (or more) per kilowatt-hour of electricity will be a harsh reality for German consumers from 1 January 2023 at the latest, and companies are no less heavily burdened. Another problem is slowly and quietly unfolding in the background, namely the shortage of skilled workers. The current Report on Education clearly shows that the number of school-leavers opting for an apprenticeship has been declining for years. At the same time, the skills of children and adolescents are declining. Currently, the labour market is already depleted. We expect the situation to worsen again significantly in the coming years. The war in Ukraine will also continue to be a factor to contend with in 2023. Here we anticipate tense global supply chains and difficulties in procuring specific raw materials or tools for the year as a whole.

Opportunities and improvements

In any case, 2023 will bring one thing with it: manufacturing companies will (have to) invest even more than before in technologies and measures that increase efficiency and reduce energy consumption. Because one thing is certain: electricity and gas will remain scarce and thus expensive in the long term. But this is exactly where the opportunities for machine and plant manufacturers lie – because if one thing is in demand, then it is inventiveness and engineering. The companies are supported by smart solutions in the field of IoT – and by platforms that streamline procurement, internationalise order placement and make customised products economical from batch size 1. 2023 will certainly not be an easy year. Maybe one full of innovations?

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