VDMA
Fewer orders in May
The high order intake in April proved to be a flash in the pan for the German mechanical engineering industry. Disillusionment set in the following month.
Germany's mechanical engineering companies have suffered a significant setback in incoming orders. Growth in April was followed by a significant slump in May. The value of orders is 27 percent below the previous year's figure, as reported by the industry association VDMA.
With a drop of 44 percent, the losses from domestic customers are much more significant than those from foreign customers, who ordered 16 percent less. In the less volatile three-month period from March to May, orders were 13 percent down on the previous year. In April, orders rose again for the first time in a year and a half.
VDMA economic expert Olaf Wortmann cites a base effect from May 2023, when an unusually high number of orders for large-scale systems came in from Germany, as the reason for the recent slump. "In addition, however, we are still seeing a pronounced weakness in investment in Germany in particular, while the decline abroad can be explained by the usual fluctuations on a monthly basis."
The mechanical engineering sector, which is dominated by SMEs and employs more than one million people, had already felt the effects of the weak global economy and the economic downturn in Germany in 2023. The industry association expects a decline in production this year.
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