European machinery companies: Achieving balance through innovation

The European machinery sector continues to operate within an uncertain and volatile macroeconomic environment characterized by the ongoing war in Ukraine, the resulting energy crisis, and persistent supply chain challenges. Rising costs are likely responsible for the margin pressure: cost of goods s...

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Bibliographic Details
Published inMcKinsey Insights
Main Authors Bayerlein, Samuel, Schleyer, Thorsten, Herring, Dorothee
Format Magazine Article
LanguageEnglish
Published New York McKinsey & Company, Inc 06.09.2023
Subjects
COVID-19
Labor shortages
Manufacturing
Productivity
Europe
North America
Germany
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Summary:The European machinery sector continues to operate within an uncertain and volatile macroeconomic environment characterized by the ongoing war in Ukraine, the resulting energy crisis, and persistent supply chain challenges. Rising costs are likely responsible for the margin pressure: cost of goods sold increased to 70.5 percent, on average, an increase of nearly 0.5 percentage points from 2021. The inventory ratio for German machinery companies increased for the fifth year in a row, likely in response to persistent supply chain disruptions facing the global economy. In the European region, the number of open jobs rose by approximately 70 percent between 2020 and 2022. Since the beginning of 2022, this number has hovered slightly above 500,000 vacancies.
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