Orders received by the German machine tool industry in the first quarter of 2024 were 24% down on the same period last year according to the latest data from the
VDW (German Machine Tool Builders’ Association), Frankfurt am Main. Orders from Germany fell by 2% whereas those from abroad dropped by a more significant 32%.
Dr Markus Heering, executive director of the VDW said: “The sector is currently experiencing a major shortfall in orders compared to last year. This is due in part to a ‘base effect’, as there were still significant levels of orders on hand at the beginning of 2023.”
On a more positive note, the first tentative signs of stabilisation are currently emerging, although the coming months will prove decisive. He continued: “Our members are telling us that there is clear demand from customers in Germany, too, but that many investment decisions are currently being put on hold due to the high level of uncertainty.”
Some indicators suggest that the situation could improve in the second half of the year. Lower inflation, reduced energy prices, the prospect of the first interest rate hikes, the end of de-stocking, improved economic indicators and higher real incomes which boost consumption could provide a basis for a return to higher investment.
This analysis is also supported by the turnround in the
Global Purchasing Managers’ Index, which returned to low-level growth at the beginning of the year. For 2025,
Oxford Economics, the VDW's forecasting partner, predicts a strong increase of 8.3% in global machine tool consumption. In regional terms, the upturn is broad-based. India, the ASEAN region, the USA, Mexico and Canada in particular are emerging as driving forces. A return to a clear upward trend can be expected in many European countries.
Dr Heering concluded: “Rising international consumption could well feed through to an increase in orders in Germany. What is crucial now in this country is for the inquiries to translate into actual orders.” He also pointed out how the German government has a role to play by ensuring that industry can look to the future with greater confidence.