Incoming orders in mechanical and plant engineering: "Expected setback"
The German industry association VDMA has reported a 6% decline in incoming orders for April. According to the association, the drop in the mechanical and plant engineering sector comes as no surprise.
"In view of the many tariff threats and tariff announcements by US President Donald Trump and the resulting great uncertainty, this was an expected setback," says VDMA Chief Economist Dr Johannes Gernandt. Domestic orders were 4% below the previous year's level, while orders from abroad were 7% lower. The decline from non-euro countries was particularly sharp (minus 13%). Orders from euro partner countries, on the other hand, increased by 11%. "In the first four months of the current year, the machinery and equipment manufacturing sector recorded a slight increase in orders of 1%. Uncertainty remains at a high level worldwide and is causing a reluctance to invest," summarises Dr Gernandt.
In the three-month period from February to April 2025, companies recorded an increase in orders of 2% in real terms compared to the previous year. Domestic business (up 1%) and foreign orders (up 2%) grew at almost the same pace. Eurozone countries ordered 11% more machinery and equipment during this period, while non-eurozone countries recorded a drop of 1%.
Setting the right course in Germany and Europe
"Global uncertainty remains high. This makes it all the more important that we set the right course ourselves in Germany and Europe," summarises the VDMA chief economist. The German government's recent announcement of a tax investment program offers hope in this regard: expansion of tax incentives for research, reintroduction of the declining balance depreciation allowance and the binding announcement of a general tax reduction. "This is all going in the right direction: increasing technology-neutral incentives for investment. Now it is important to quickly follow up these announcements with action. The Bundestag and especially the Bundesrat should approve these laws without watering them down. That would be important for Germany as a business location and important for the machinery and equipment manufacturing industry," emphasises Dr Gernandt.
Caption: In April, Germany’s mechanical and plant engineering sector faced a decline in incoming orders. However, there were also positive signs: orders from eurozone partner countries rose by 11%. (Image: Imago)
Source: VDMA