Orders received by the German machine tool industry in the third quarter of 2022 were 9% up on the previous year’s figure. Orders from Germany rose by 3% whereas those from abroad were up by 12%. Demand rose by 26% overall in the first nine months of 2022 with domestic and foreign orders accounting for growth of 25 and 26% respectively.

Dr Wilfried Schäfer, executive director of the German Machine Tool Builders' Association (VDW), said: “Our industry's orders have held up well so far, despite all the adverse factors. Although the growth is clearly slowing, both September and the third quarter as a whole are positive. However, there was an 8% increase in producer prices in the machine tool industry in the third quarter. The effect of this was that earnings stagnated on a price-adjusted basis. As we are seeing everywhere, inflation is eating away at our growth.”

Orders for the year as a whole are nominally only 7% below the record volume posted in 2018. This record level has been matched abroad, however the figures from the domestic market are one fifth below it.

Mr Schäfer continued: “At the same time, capacity utilisation rose to just over 90% this October. “The supply bottlenecks are now easing slightly, it seems. This is evident from sales, which have also increased by 10% in the first nine months. Machining is the larger sector in the machine tool industry, and with its heterogeneous customer base it is outpacing the forming sector here, posting a 17% increase.

Forming is dominated by the pressing sector; it is often used in large-scale projects and is characterised by less prominent cyclical swings. Sales here are down 6% in the first 9 months of the year. However, this can be explained by the strong base from the previous year. Forming technology grew by a fifth in 2021, while for machining the figure was only 3%.

The sector now expects to see orders cool noticeably in the fourth quarter as Germany and Europe in particular are lagging behind, while Asia and America, which have been little affected by the energy crisis, are expected to perform more solidly.

Mr Schäfer concluded: “Nevertheless, we will finish the year with overall growth in production.” The sizeable backlog will ensure that production remains high, as it takes time to process the orders.