Juan Ignacio Yagüe, commercial Director of Pferd-Rüggeberg
The industry has had much to do in this economic bonanza, being one of its fundamental pillars productivity improvement. The tool sector has contributed, in part, in this process to improve the quality of their products, offering increasingly better equipment and more suitable to the requirements of the user.
Most of the companies considered that the use of tools of quality in their manufacturing processes is synonymous with increased performance and therefore increased profitability.
However, some companies, giving priority to the price on quality, in their purchase decision, have opted for tools manufactured in Southeast Asia, with few security requirements, using manpower in appalling working conditions and without any control over the environmental effects.
Most of the European tool manufacturers are scrupulously fulfilling EU legislation in our manufacturing processes: labour rights, environment, safety at work, etc., as well as the requirements relating to the product: quality, security, guarantees, etc.
It is necessary to highlight logical observance and compliance with these regulations represent expenses that do not support third-party and therefore place us in a clear and unfair disadvantage with respect to them, a fact that should be taken into account by all.
Many companies have decided to relocate its production to other countries with lower costs and legal requirements, which may be deprived in the medium and long term of the industrial sector in developed countries. If this process becomes widespread, we cannot turn into mere providers of services with a total dependence on other economies.
Despite these circumstances, some tool vendors, we have continued making here, improved our products, reinforcing their measures of security, its ergonomics and ease of use, of concern to us that our tools will work faster, are more comfortable and secure in your application.
And finally, we are also preserving the environment, producing with the latest techniques, minimizing waste and using less polluting materials.
As for the evolution of the sector and trends, I would say that the economic slowdown which began in July 2007, has been transformed in crisis in 2008. The construction sector has entered a clear recession and is expected to drag into other sectors.
If we look at our channel of distribution, industrial supplies and hardware sales figures, we are collecting information that there are significant declines in their sales (between 15 and 20 per cent) over the same period of last year.
We do not know yet the level of severity, but it is clear that, at least, going to assume that economic activity will slow. In any case, it seems that it will not be as serious as the latest crisis which we underwent in the early 1990s.
On the other hand, the duration is unpredictable, but according to different sources could be extended until the year 2010.
However, it is necessary to bear in mind that in the same way that when there have been large increases in the construction, has not resulted in increases of the same magnitude in the industrial sector, now true in the opposite direction.
The halt of the construction, with declines of 20 or 30 percent of the volume of sales, has not been the same percentages of decline in the industrial sector: the average rate of the IPI (Industrial production index) is situated at - 3.7 per cent in the first three months of 2008. Discounting the effects of calendar, this average rate is located in the _ 0.2 per cent.
In summary, the next 2 or 3 years will not be of great growth for the industrial sector, but nor it will mean a profound crisis.