Germany’s mechanical engineering and plant-building sector has had a disappointing start to the year, its association VDMA says in a statement seen by Kallanish.
The machinery and equipment manufacturing companies organised in VDMA in January have reported an order intake 6% below that of January 2025, including adjustment for price changes.
Domestic orders were 8% below January 2025, while orders from abroad were down by 5% during the month. Demand from eurozone countries (-8%) was even weaker than business with non-eurozone countries (-4%), VDMA notes.
In the less volatile three-month period from November 2025 to January 2026, the companies recorded a total decline in orders of 2% in real terms. Domestic orders fell by 4%, foreign orders by 1%. Orders from eurozone countries fell by 4%, while orders from non-eurozone countries stagnated.
“Some sentiment indicators had recently pointed upwards, so the decline in orders in January is a surprisingly weak start to 2026,” VDMA chief economist Johannes Gernandt says. “So far, it is only a monthly figure; we will have to wait and see how orders develop in the coming months,” he adds.
In a sentiment survey in January, 30% of companies were optimistic about the next six months, compared with 21% polled in October. Only 9% expect the situation to deteriorate. VDMA at the time was therefore encouraged to forecast a slight year-on-year increase in production of 1% in real terms for 2026.
However, the Middle East has been one of the larger regions to which German machinery exports increased in 2025. Of all countries, the two main markets for German machinery makers, Saudi Arabia and the United Arab Emirates, are the most affected targets of recent Iranian missile and drone attacks. Both countries taken together account for export revenue of €4 billion ($4.6 billion).
