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Machine Tool Demand in Germany Slows Down, Reports VDW

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Machine Tool Demand in Germany Slows Down, Reports VDW

The German machine tools market is experiencing a slowdown as demand has stalled, according to the latest report from the German Machine Tool Builders’ Association (VDW). The industry, which has traditionally been a cornerstone of Germany’s manufacturing sector, is facing numerous challenges. The VDW report highlights a decline in both domestic and international orders, posing potential concerns for growth and stability in the coming months.

Orders received by the German machine tool industry in the third quarter of 2024 were 16 percent down on the same period last year, reveals the report published by VDW.

It said, “Orders from Germany fell by 17 percent whereas those from abroad dropped by 15 percent. Orders received in the first three quarters of 2024 were 23 percent down on the same period last year. Domestic orders were 10 percent lower. Orders from abroad were 28 percent below the previous year’s figure.”

Commenting on the result, Dr. Markus Heering, Executive Director of VDW said, “The order situation remains challenging. German industry performed comparatively well in the first nine months of the year, supported by a number of major individual projects.

He adds, “In general, however, domestic customers are very unsettled and are unwilling to invest,” says Heering. This is dragging down the domestic European market as a whole, as Germany is the most important trading partner for many countries. The other ‘triad’ regions have also lost ground. Asia is most badly affected due to the weak demand from China. There is still no improvement in sight here. The smallest decline has been posted in America. The US and Mexico in particular have propped up demand.”

“We have seen little change in the state of the industry since the first half of the year,” says Heering. “The stream of news coming from the automotive industry is giving cause for concern. And overall business levels are down across the board, both in the markets and in the customer industries. A number of major projects from the aerospace, medical technology, energy, shipbuilding and defense sectors are helping,” he reports. Outperforming the new machine business at present are services, components, repairs, maintenance and conversions. Automation remains a key driver of machine tool investment in the sector.

According to association surveys, significantly more machine tool manufacturers are planning to reintroduce short-time working in the near future. 35 percent of respondents were considering this in the second quarter, with the figure rising to 45 percent in the third quarter. There are also plans to reduce the numbers of temporary workers. At the end of the first half of the year, the sector employed around 65,250 people.

As per VDW report, the production forecast for the year as a whole remains unchanged: a decline of 8 percent.

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