German mechanical engineering sees some light

After 1.5 years of continuous decline, orders for mechanical and plant engineering in Germany rebounded year-on-year for the first time in April. Compared to April 2023, orders rose by 10%, Kallanish learns from industry federation VDMA.

Domestic orders were up 3%, while orders from abroad rose by 13%. Growth from non-euro countries was particularly strong, at 19% while orders from the eurozone inched up only 1%.

VDMA chief economist Ralph Wiechers notes that some factors helped the good performance in April, which had three more working days than April 2023. Also, “a comparably weak April 2023 ensured a low basis for comparison,” he says. Furthermore, large-scale plant business, which often involves large orders, contributed to the result. This could likely include investments in steel plants, although VDMA does not give details here.

One month earlier, the picture was still quite different, when orders in March fell significantly short of the previous year’s figure, declining 17% on-year. However, March 2023 was the strongest month of the entire past year, VDMA explains.

Looking at the less volatile three-month period from February to April 2024, orders fell by 9% in real terms compared to the previous year. Domestic orders were down 12% and orders from abroad were down 6%.

According to VDMA’s economists, the mood of many industrial customers has improved, especially outside Europe, but it will be some time before this is reflected in a sustained increase in orders. “However, we are encouraged in our assumption that order intake has bottomed out,” Wiechers concludes.

Christian Koehl Germany