Global engineering firm predicts growth despite tough economic conditions

Global engineering firm Spirax said the company expects to see organic growth despite tough market conditions.

The Cheltenham firm said global industrial production growth1 ( in the first quarter of 2024 was 1.7%.

As expected, growth was negative in key markets such as the USA, Germany and South America, while conditions in China also weakened.

Growth in key markets is forecast1 to recover through the balance of the year, weighted towards the second half.

In the first four months of the year, demand was broadly flat against the strong comparative period.  Demand from Pharmaceutical and Biotechnology  customers has started to show early signs of improvement although, as expected, there has been no increase in demand from Semiconductor Wafer Fabrication Equipment  customers.

All three of businesses within the group delivered organic sales growth in the first four months of the year.

Low single-digit organic growth in group sales was in-line with expectations given last year’s strong comparative period.

Group adjusted operating profit margin was slightly ahead compared to the same period in 2023.

A statement said: “We continue to anticipate mid to high-single-digit organic growth in group revenues, in line with the forecast phasing of IP and an increase in Biopharm and Semicon demand during the latter part of the year.

“Currency headwinds are expected to persist throughout the rest of the year, with an impact of approximately 3% to sales and approximately 6% to adjusted operating profit.  We therefore anticipate modest progress in the group adjusted operating profit margin compared to the 20.7% achieved in 2023, with adjusted operating profit2 more second half weighted than usual.”