German Machinery Market Burdened by Uncertainty

The Mechanical Engineering Industry Association (VDMA) reports that the September order intake in the German machinery and plant engineering sector only maintained its previous year's level; not enough to achieve the same rate of growth as in previous months.

"Companies are feeling the uncertainty of customers due to the many trade sanctions and protectionist announcements worldwide," explains VDMA Chief Economist Dr. Ralph Wiechers. In total, orders from abroad fell by 2 percent in real terms, with a decline of 1 percent in the Euro zone and 2 percent fewer orders from Non-Euro countries. Domestic orders, on the other hand, rose by 6 per cent. "This is a gratifying figure, but it would have been somewhat lower without the orders from large-scale plant business," analyses Wiechers.

In VDMA’s three-month comparison from July to September 2018, orders were up 3 percent in real terms on the previous year. Domestic orders increased by 8 percent during this period, while orders from abroad rose by 1 percent. Orders from the Euro zone grew by 3 percent, orders from Non-Euro countries by 1 percent.

ARC’s Outlook

We’re at a turning point in the market developments, with a weakening across discrete automation markets and accelerating growth on the process automation side. ARC’s Director of Research Florian Güldner has already pointed out this development earlier this year in the “Outlook Machinery Market”, in which he examines e.g. indicators for concern and provides an outlook for the machinery market.

This development influences the Automation Market too. ARC analyzed the possible repercussions in its current Automation Index, showing how investments in automation will be strongly industry-dependent.