German engineering sentiment improves but remains shaky
The mood in Germany’s mechanical and plant engineering sector improved somewhat at the start of 2025 but remains very mixed, according to the latest survey by association VDMA conducted in late March.
Just over a quarter (27%) of the total of 940 companies now rate the current situation as very good or good, compared with 22% in January, Kallanish hears. By contrast, 30% rate the situation as poor or very poor. The outlook has also brightened somewhat: almost one in three companies expect the situation to improve in the next six months, versus only 22% in January.
However, “this may only be a snapshot”, cautions VDMA chief economist Ralph Wiechers. The survey was completed before 3 April, so the latest tariff announcements by the USA and the reaction of the countries affected are not yet reflected in the results.
As a positive factor, the drop in interest rates should also have a favourable impact on the industry. In addition, the industry will also be able to benefit from Germany’s €500 billion special fund for infrastructure investments – if bureaucracy and long approval procedures do not slow down the investment climate.
North America, as the most important overseas market, has lost ground. In January, 42% of companies rated sales opportunities in North America as good or very good. But, with a view to the next six months, North America received only 29% of responses in March.
Germany, on the other hand, was able to catch up considerably. Almost one third of companies expect a positive domestic business trend, versus only 13% in January.
