CECIMO’s Economic and Statistical Toolbox for Q2 2026 provides an updated assessment of the European and global machine tool sector. The latest data suggest the sector is gradually moving towards stabilisation, although there is not yet evidence of a broad-based recovery.
Machine tool order activity remains mixed. The CECIMO8 total orders index increased by +4% in Q2 compared with the previous quarter and was +8% higher than a year earlier. However, this masked a significant difference between domestic and foreign markets. Foreign orders were -6% lower quarter-on-quarter but remained +4% above their level a year earlier, while domestic orders fell by -12% compared with Q1 and were -10% below Q2 2025.
The comparison with global orders provides some useful context. World machine tool orders increased by +0.3% quarter-on-quarter and +13% year-on-year, while orders outside the CECIMO8 countries increased by +8% and +25% respectively. This suggests that the weakness evident in European machine tool demand is more pronounced than in some other major markets.
The wider investment environment is somewhat more supportive. Gross fixed capital formation strengthened again in Q2, with both machinery and equipment investment and total fixed asset investment increasing. Machinery and equipment investment moved slightly above its previous peak at the end of 2025, while total fixed capital formation reached a new high. Nevertheless, this resilience has yet to translate into a broad-based increase in machine tool investment, with manufacturers continuing to be selective over new capital expenditure.
Production data remain a particular concern. While broader European manufacturing activity and the manufacture of machinery and equipment have shown modest improvement, the EU machine tool production index fell to 82.6 in Q2 2026, its lowest level since Q2 2020. The divergence between machine tools and the wider manufacturing sector has become increasingly pronounced following the broadly similar movements seen in 2022 and 2023.
CECIMO suggests that this continuing weakness reflects more than short-term cyclical factors, pointing to persistent softness in industrial demand, structural competitiveness challenges and increasing pressure from producers outside the EU. At the same time, aerospace, defence and selected transport-related sectors continue to provide comparatively strong support, while demand from several traditional machine tool-consuming industries remains weaker.
Looking ahead, the outlook for the remainder of 2026 remains uncertain. Moderating price pressures provide some relief, but geopolitical tensions, trade frictions, competitive pressures and weak industrial demand continue to weigh on business confidence and investment decisions.
Overall, the Q2 Toolbox presents a mixed picture for the European machine tool sector. There are clearer signs of stabilisation, particularly in the wider investment environment and some areas of order demand, but these have yet to develop into a sustained recovery. A stronger upturn is likely to depend on improving industrial demand and greater willingness among manufacturers to commit to new capital investment.
You can download the report from the members area of the MTA website at https://www.mta.org.uk/members-area/market-intelligence/global-mt-report/.