Despite sales growth: medical technology sector suffers in times of crisis

Despite the crisis, the industry association Spectaris is forecasting moderate growth for the German medical technology sector. Figures from the Federal Statistical Office for the period from January to August 2022 show a 4.1% increase in sales in the medical technology industry. For 2022 as a whole, the association expects a slightly lower increase of 3.5%, which would correspond to industry turnover of 37.7 billion euros.

With an expected export ratio of just under 67%, domestic sales are expected to grow by just over 3% and foreign sales by around 4%. While exports to Asia declined slightly in the first half of the year (-3.7%), particularly due to lockdowns and travel restrictions in China, exports to North America rose significantly in the same period (+8.5%).

„We expect the German medical technology industry to increase its nominal turnover again in 2022. However, this is not a reason to be happy“, emphasises Marcus Kuhlmann, Head of Medical Technology at the German industry association Spectaris. The Russian war of aggression in Ukraine, massive supply chain disruptions, the effects of the European Medical Device Regulation (MDR) and drastically rising material, energy and logistics costs are causing increasing concern. Sales growth is therefore a double-edged sword, as it is accompanied by cost increases, which worsens the earnings situation.

EU MDR is already causing supply problems

Kuhlmann continues: „The competitiveness and innovative capacity and thus the existence of many small and medium-sized medical technology manufacturers is currently definitely jeopardised. Politicians must act quickly and decisively to counter these crises with all necessary means.“ This applies in particular to energy cost containment and financial aid for SMEs, urgent adjustments to the MDR, the use of supply and health data for the research-based industry and increased research funding for key technologies. Among other things, companies have cut back their research and development budgets, says Kuhlmann. In addition, the MDR effort for the recertification of various niche products or products with small quantities is often no longer worthwhile. This would already mean that numerous medical devices are no longer available in hospitals today.

Spectaris also advocates focussing the work of the Federal Office of Economics and Export Control on the needs of the economy. Companies need faster export licences and quicker approval of funding applications, for example in the area of energy efficiency," said Kuhlmann.

Slight increase in sales also expected for 2023

According to the Ifo economic survey as of October, however, the mood in the industry is increasingly gloomy. The majority expect the business situation to deteriorate over the next six months. 90% report that production will be hampered by a shortage of materials and 40% by a shortage of skilled labour. For the coming year 2023, the association expects sales growth despite the major challenges, even if this will be weaker than in 2022.