No Economic Turnaround In Sight For German Machine Tool Orders
Orders received by the German machine tool industry in the fourth quarter of 2023 were 17 percent down on the previous year’s figure. Orders from Germany fell by 20 percent whereas export orders dropped by 15 percent. Demand increased by 11 percent in nominal terms in 2023 as a whole. Domestic demand was down 14 percent, while overseas demand was 9 percent lower. In real terms, there was a 16 percent decline in demand over the year as a whole.
“Our industry is receiving no impetus from the global economy at present. The international purchasing managers’ index reveals weak performance in the key markets,” said Dr. Markus Heering, Executive Director of the VDW (German Machine Tool Builders’ Association), Frankfurt am Main, commenting on the result. The only exceptions which could provide any impetus are India and Mexico. Domestic demand is also continuing to suffer from the geopolitical and economic uncertainty as well as from high interest rates and energy prices. “Small and medium-sized companies in particular are holding back on investments. Germany and the eurozone remained weak in the second half of the year. The same applied to the important Chinese market, whereas sales to North America held up well,” continued Heering.
According to the association’s statistics, there was a further nominal increase in turnover of 10 percent in 2023 due to well-filled order books. However, the 3 percent increase in the fourth quarter was significantly lower than the levels posted in the previous quarters. Most recently, in December 2023, the figures turned negative on the back of declining order volumes.
The lack of orders has prompted the VDW to forecast a slight decline in production of 3 percent for 2024. Expectations are focused on growth sectors such as electric vehicles, wind power, medical technology, aerospace and defense. Investments here are increasingly taking the form of projects, which are less affected by the general economic downturn than series production in job shops, for example.
“The economy in Europe, the largest sales region, is not expected to recover until next year. Some stimulus could come from Eastern Europe in the form of investments by the automotive industry and in connection with renewable energy,” concluded Heering
For more information: www.vdw.de
