Orders for Germany’s mechanical engineering drop deeply

Mechanical engineering companies in Germany suffered a major decline in orders in the first six months of the current year, Kallanish learns from their association VDMA.

In the first half of 2020 incoming orders fell by -16% in real terms compared with the previous year. The decrease in orders from abroad was much stronger than the decline in orders from Germany, VDMA points out.

The difficult situation becomes clearer when looking at the three-month period from April to June, in which orders dropped by -30% compared with the previous year.

Domestic orders fell by -20% and foreign orders by -34%. Orders from the euro countries shrank by -24%, and by -38% from non-euro countries. The decline is attributable to a global economy weakened by trade disputes and political upheavals, which was additionally hit hard by the Covid-19 pandemic, the association’s economic expert Olaf Wortmann explains.

In June 2020, order intake in the German mechanical engineering industry fell by -31% in real terms y-on-y. While domestic orders were down -12%, orders from abroad even dropped by -38%.

“There is, however, a base effect that plays a role here,“ Wortmann noes. “In June 2019, there was an enormous amount of large plant business in the orders from non-euro countries.” Hence, orders from non-euro countries decreased by -44%. From the euro zone, the industry recorded a decline in orders of -14%.