The EU mechanical engineering sector is forecast to face another recession in 2025, with output expected to shrink by 1.7% on-year, followed by only a modest recovery of 1.1% in 2026 – though this outlook remains uncertain, according to Eurofer.
Following modest growth of 1.1% in 2023, the sector experienced a sharper-than-expected decline of 5.2% in 2024. This marked a reversal from the strong post-pandemic rebound, which saw growth of 11.7% in 2021 and 5.2% in 2022, after a 10% contraction in 2020.
Mechanical engineering output declined for the fifth consecutive quarter in Q4 2024, falling 4.7%, after seeing a 4.6% drop in the previous quarter. Although the sector had exceeded pre-2019 output levels during its recovery, its momentum has been increasingly undermined by the prolonged impacts of the Russia-Ukraine war, escalating global geopolitical tensions, and a weakening industrial outlook. These factors triggered a downturn in late 2023 that is expected to persist through 2025, Kallanish notes.
Elina Virchenko Bulgaria
