Mechanical engineering
VDMA expects production growth of 2% for 2019
The VDMA is convinced that mechanical engineering companies can also expect production growth in 2019 thanks to the good order situation and high order backlog. However, there is growing uncertainty among export-dependent investors due to increasing political risks.
"As long as the uncertainties surrounding Brexit remain and the trade conflicts continue to escalate, the risks for the mechanical engineering industry in Germany will also increase," explains VDMA Chief Economist Dr. Ralph Wiechers. The industry is currently in a good position overall; an average order backlog of 8.6 months (as of June 2018) shows that many companies are working at full capacity into the coming year. "However, we expect economic momentum around the world to slow down, which will have an impact on demand for capital goods. We therefore expect real production growth of 2% in the mechanical engineering sector in 2019 compared to 2018," says Wiechers.
For the current year, the VDMA economists confirm their production forecast of 5% in real terms. In the first seven months, the mechanical engineering industry achieved production growth of 2.9%. "Due to the pleasing order intake of plus 7% in real terms in the first seven months, we see a good chance that production will increase by 5% in 2018. However, the risks here have also increased significantly," warns Wiechers. In addition to political uncertainties, many companies are increasingly experiencing supply bottlenecks, which are slowing down momentum on the factory floor. On the other hand, mechanical engineering companies in particular are benefiting from the fact that many customers want to invest in the automation of their own production. Exports by mechanical engineering companies in Germany rose by 4.3% between January and June.
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