Orders for German mechanical engineering and plant-building companies declined in the first half of 2024 by 12% on-year in real terms, according to industry association VDMA.
Domestic orders fell especially harshly, by 18%. Foreign orders fell by 9%, with euro countries falling more sharply (-14%), and non-euro countries by 7%. In June alone, the trend continued, with orders down 9% year-on-year. Domestic orders fell 8%, while orders from abroad dropped 10%, with euro countries down 12% and non-euro countries down 8%.
VDMA traditionally states its comparison in “real terms”. While nominal terms compare the straight sales figures, VDMA deducts the price inflation for a more comparable basis. “This year, the difference from prices was not that much at +2%, while last year it was +9%,” VDMA chief economist Ralph Wiechers informs Kallanish.
He explains that the calculations try to consider increases in intake materials and services, and to what extent they can be handed down. He also points out that the trend is currently opposite in China, which is seeing deflation and a decline in prices because of high inventories. He also mentions lower steel prices due to subsidisation in China.
“The order situation is disappointing overall,” Wiechers writes in VDMA’s statement on the figures. “A turnaround is not yet in sight, and what’s more, the economic stabilisation that was still emerging at the beginning of the year has recently suffered a setback,” he continues. In this context, he demands a supply-oriented policy for more investment and innovation, “to ensure that the first signs of a foreign-driven cyclical recovery are not thwarted”.
Christian Koehl Germany
