Orders received by the German machine tool industry in the third quarter of 2021 were 69% up on the previous year's figure. Domestic rose by 67% while export orders rose 71%. Orders received by German manufacturers increased by 61% in the first nine months of the year — domestic orders were up 47% and overseas orders were 69% higher than in the corresponding period last year.

Dr Wilfried Schäfer, executive director of the VDW (German Machine Tool Builders' Association), based in Frankfurt am Main, said: “The level of orders in hand are good. However, supply bottlenecks and sharp rises in the price of raw materials and components are increasingly holding back business.

“Orders are expected to continue rising in the coming months driven by catch-up effects that will continue for quite some time.”

However, it may not always be possible to translate the orders into sales as desired, as supply chain issues, especially for electronic components, continue to be a global problem.

Mr Schäfer added: “That is why we are having to scale this year’s summer forecast of 8% growth down to 5%.”

Double-digit growth is expected, by contrast, in the coming year. Orders are also slowly catching up in relation to the figures posted in 2019, the year before the pandemic, which is generally considered to provide a more meaningful evaluation of the current situation.

The figures for the first nine months are 4% higher than for the same period in 2019. However, the domestic market is still running at 12% below the 2019 level.

Mr Schäfer continued: “The all-important automotive industry is suffering particularly from the chip shortage in Germany and is therefore cutting back on investment.”

The main driving force is export markets, where an increase of 13% was posted. Of the top 15 machine tool customers, two thirds are back above the 2019 mark, especially Austria and Italy. The exceptions are the UK, Poland and France, which have not yet returned to their pre-crisis levels.

The strong demand is resulting in a noticeable increase in capacity utilisation. This was 86% in October compared to 71% as the average for last year. However, employment — a delayed indicator of economic development — has not yet bottomed out.

In September it was 8.5% below last year’s figure of 63,300 employees. At the same time, , in a recent VDMA survey, 46% of companies reported a considerable shortage of skilled workers. There is currently a shift in demand towards more electronics-based skills.

He concluded: “All in all, our industry considers itself well on the way towards overcoming the crisis. We expect supply chains to stabilise again in the coming year. Our industry will then be able to continue its recovery.”