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German Engineering Orders Dip Amid Global Fears
2 Jul
Summary
- Mechanical engineering orders fell 1% in May year-on-year.
- Demand from eurozone nations dropped significantly by 21%.
- Economist urges immediate government reforms for businesses.
In May, Germany's mechanical engineering sector saw a 1% real-term decrease in orders compared to the same period last year. This decline was significantly impacted by a substantial 21% drop in demand from eurozone partner countries. Orders from non-eurozone nations, conversely, experienced an 11% rise.
VDMA chief economist Johannes Gernandt attributed this slowdown to customer apprehension regarding ongoing global crises. These concerns are fueling fears of future supply bottlenecks for essential raw materials, leading to a hesitant ordering behavior within the industry. Gernandt stated that the sector is currently in a 'wait-and-see mode'.
To counter this trend, Gernandt emphasized the critical need for swift government action. He called for immediate implementation of reforms that offer tangible relief and support to businesses, asserting that Germany's industrial foundation requires significant upgrades to remain competitive.
Looking at a broader timeframe, the period from March to May indicated a more positive trend. Over these three months, domestic orders increased by 3%, and international orders saw a 13% rise, with exceptionally strong large-scale orders recorded in March contributing to this growth.
