German machine builders continue to struggle with weakening demand. The drastic decline in export business in particular could become a burden.
The slump in orders in German mechanical engineering continued in April. After a slight recovery in the previous month, there was a strong setback in April, as reported by the German Mechanical Engineering Industry Association (VDMA) in Frankfurt. Orders fell by 20 percent compared to the same month last year, in March the decline of six percent still gave hope for a trend reversal. It was the first month since September 2022 with a single-digit minus rate.
Orders from abroad fell particularly drastically: According to the VDMA, the important export business recorded a minus of 23 percent. Domestic orders were down 15 percent. However, many companies still have a larger order backlog.
Bad mood in the global economy
“This monthly result reflects the mood in the economy that has recently deteriorated,” said VDMA economic expert Olaf Wortmann. He doesn’t expect a quick turnaround: “The global economic burdens are still great, so that an improvement in incoming orders is unlikely.”
In 2022 as a whole, a slump in orders in the final quarter pushed the annual balance sheet of the medium-sized industry with more than one million employees into the red: In real terms, incoming orders were ultimately four percent below the previous year’s value.