Continued Downturn in European Machine Vision Market Predicted

Sales in the machine vision industry in Europe dropped 7% in 2023 and are expected to decline an additional 3% in 2024.

“It has been a tough, tough year,” says Mark Williamson, chairman of the board of VDMA Machine Vision (Frankfurt, Germany) and consultant to Stemmer Imaging (Puchheim, Germany).  VDMA, or the Mechanical Engineering Industry Association, is a German trade group representing mechanical and plant engineering companies in Germany and Europe. “Having a drop in order entry in the second half of 2023 is what is causing the lower revenue in 2024,” Williamson adds.

Specifically, sales turnover in the machine vision industry totaled €3.2 billion in 2023, down from €3.4 billion in 2022.  VDMA expects sales of €3.1 billion in 2024.

The sales downturn wasn’t felt evenly across VDMA’s membership in 2023. Component manufacturers experienced a 15% drop, compared with 5% for systems integrators.

VDMA’s Machine Vision division released the results and forecasts during a press event in April about VISION, a machine vision trade fair scheduled for October 8-10 in Stuttgart, Germany.

Williamson pointed to the weak global economy and geopolitical crises, such as the war in Ukraine, as contributing factors in the downward business cycle, which has led many companies to hold back on new capital investments.  

Related: Will 2024 be a Better Year for Machine Vision than 2023?

However, the overall tone of Williamson’s comments was positive. He says that VDMA expects the machine vision market to begin its recovery in the fourth quarter of 2024. “We are seeing the beginning of this happening; interest is beginning to grow. We will be in recovery, we predict, by VISION,” he says.

Williamson also told attendees at the VISION press event that he remains bullish on the industry’s prospects. “Vision technology is actually outperforming the wider industry, which is really positive, showing that machine vision is a robust market to be in and it is a good investment.”

Williamson says the downturn is only the second “dip” that has occurred in the machine vision market in the last 15 years; the first occurred in 2020 during the pandemic. Sales have grown an average of 9% over the last 10 years.

In 2020, during the pandemic, sales dropped 4%, followed by years of rapid growth: 17% in 2021 and 11% in 2022.

Dr. Olaf Munkelt, managing director of MVTec Software GmbH (Munich, Germany), also attended the press event. He notes that the current downturn is a typical phase in the industrial business cycle, following the post-pandemic bump. 

"There are different cycles, which overlay each other. We have now this cycle that we have never had before that’s called the pandemic cycle. And then we have the usual industrial cycles. When they overlay at one point, you get a huge overswing, and on the other side, you get a huge downswing and this is where we are at the moment, I think."

The VDMA outlook for Europe mirrors other forecasts released this year. For example, Interact Analysis (Irthlingborough, UK), predicts a global growth rate in 2024 of 1.4% in the machine vision market, with higher annual growth rates returning in 2025.

Similarly, the Association for Advancing Automation (A3) fields regular surveys of its members to ask about their expectations for sales during the upcoming six months and the full year. 

When asked about their sales expectations for the entire automation industry, including machine vision, for 2024, a majority predicted a better year over the next 12 months in North America. A total of 39.30% of respondents expect sales to be up significantly (10% or more) in 2024, compared with 2023, and 39.74% expect sales to be up moderately (1% to 10%).

Only 13.54% of its members predict flat sales in 2024, while 6.11% expect a moderate decline (-1% to -10%) and 1.31% expect sales to be down significantly (-10% or more).