German Machine Orders Decline 22%

Orders continue their downward trend in the machine tool industry in the second quarter. The VDW reports that many sectors are currently reluctant to invest.

Orders received by the German machine tool industry in the second quarter of 2019 witnessed a combined 22% down-turn over the same period in 2018. Orders from the German domestic market fell by 28%. Export orders were 18% down.

Orders received declined by 21% in the first half of 2019 with German sales down 19% in this period and export sales declining 23%.

“In the second quarter, orders are once again more than twenty percent down on last year’s strong figures,” said Dr. Wilfried Schäfer, Executive Director of VDW –  The German Machine Tool Builders’ Association, commenting on the result. “The base effect can no longer disguise the global decline in investment in mechanical and plant engineering,” Schäfer continued.

The machine tool industry is not immune to the factors that are creating so much turbulence in the global economy as a whole and that are currently the subject of much discussion: “We are in the same boat as the other major international suppliers. Orders for machine tools have collapsed worldwide. Many countries are now having to pay the price for the almost daily international disputes being picked by politicians,” stated Schäfer.

The machine tool sector is a pure supplier of capital goods and equipment to industry, and as such is exposed to pressure from weak demand in the major customer industries, the engineering sector and the automotive industry. The latter is additionally undergoing a protracted period of uncertainty as a result of the tentative transformation process towards new drive technologies and is cutting back investment accordingly.

Within the triad of suppliers, the eurozone is still performing strong where orders “only” fell by 5% over the first six months, while those from non-eurozone countries were down by 28 %.

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