German Machine Tool Orders Rise

In the second quarter of 2014, order bookings in the German machine tool industry rose by one percent compared to the second quarter of 2013. Domestic order bookings were up 16 percent on the preceding year, whereas export orders fell by seven percent. For the first half of 2014, order bookings were up six percent on the preceding year’s figure overall. Domestic order bookings rose by 18 percent, while demand from abroad was down by one percent.

“German machine tools were still in demand during the year’s first half,” commented Wilfried Schäfer, the executive director of the sectoral organization VDW (German Machine Tool Builders Association; Frankfurt am Main, Germany). “Demand from domestic customers in particular has picked up perceptibly, whereas demand from abroad has slid into minus territory. The general uncertainty due to numerous trouble-spots is causing foreign customers to hold back on new investment projects. This is being reflected particularly in the year’s second quarter, by falls in machine tool orders from countries outside the eurozone. In the eurozone itself, by contrast, there is a returning uptrend, with a plus of 13 percent.”

Sales finished the year’s first half with a black zero. “For production output, we are nonetheless staying with a growth forecast of three percent in the ongoing year,” emphasizes Schäfer. “However, this is an ambitious target and conditional upon another recovery in demand from abroad.”

In the first half of 2014, sales shifted towards the German market, mirroring the development in order bookings. Exports, by contrast, are showing signs of deceleration. One of the causes involved is the fall in deliveries to China, South Korea and India. “Business with Asia is proving more sluggish than we’d hoped,” notes Schäfer.

Nonetheless, international industrial production output and capital investment are expected to gain in momentum during 2014. The United States remains the growth driver for demand recovery among German manufacturers, while Europe is suffering from stagnation overall.

The German machine tool industry ranks among the five largest sectors in the country’s mechanical engineering segment. It supplies production technologies for metalworking applications to all categories of manufacturer, and makes a crucial contribution towards progressing innovation and productivity in the industrial sector overall. Due to its absolutely key position for industrial production output, its development is also an important indicator for the economic vigour of the country’s industrial sector as a whole.

In 2013, the German machine tool industry produced machines and services worth around 14.5 billion euros, and was employing about 71,600 people (annual average for 2013, firms with more than 20 staff). This corresponded to growth of two percent.

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