Orders received by the German machine tool industry in the second quarter of 2025 remained at the same level as in the same period of the previous year. Domestic orders fell by 14%, while orders from abroad rose by 7%. In the period from January to June 2025, orders fell by 5%. Domestic demand fell by 22%, while foreign orders were up 4% on the previous year.
Dr Markus Heering, executive director of the
German Machine Tool Builders' Association (VDW) in Frankfurt am Main, said: “The main impetus in the first half of the year came from Europe, although demand levels have not yet picked up in the domestic German market.”
The ongoing uncertainty caused by the US tariff policy and the many other crises is causing investors to take a wait-and-see approach. While the recently negotiated tariff rate of 15% applies, this will increase costs and significantly inhibit German exports to its largest market, the USA. Dr Heering continued: “US industry urgently needs our machines because no comparable domestic alternatives are available, yet small and medium-size US companies in particular will not be able to pay the higher prices.”
By contrast, the medium-term outlook in Germany is brightening. The approved increase in spending on defence and infrastructure as well as the recently adopted investment package could noticeably raise consumers’ willingness to make new purchases. In any case, the IFO business climate index is signaling improved sentiment in the German manufacturing industry. While the international Purchasing Managers' Index (PMI) also shows that the slump in the industrial sector is bottoming out, it does not represent the hoped-for turnaround.
Dr Heering added: “The recovery of the machine tool industry has been put back once again. We do not anticipate a return to stable growth until 2026.” Domestic demand in particular is expected to provide a boost, while foreign business is likely to be weaker than previously expected. “The tariff policy of the US is harming its own economy the most – which will not be providing any great impetus in the near future.”
Sales of machine tools in the first six months of this year were down 9%. Nevertheless, the sector is eagerly awaiting
EMO Hannover 2025 taking place 22-26 September. Mr Heering concluded: “More than 1,500 exhibitors will be presenting a whole range of innovations designed to raise their customers' competitiveness. We are expecting this to provide crucial impetus.”