A slump in orders in Germany’s machinery and plant engineering sector has continued recently, with inflation-adjusted orders in August falling 21 per cent year-on-year, the industry association VDMA said Wednesday.
While domestic orders declined 13 per cent, international demand dropped by as much as 24 per cent.
“Unfortunately, there is no sign of a turnaround in orders from Germany and abroad in view of the continuing slump in the global economy,” said economic expert Olaf Wortmann from VDMA, which represents some 3,600 German and European mechanical and plant engineering companies.
Germany’s industry as a whole had already recorded a decline in orders in July, with a particularly sharp drop of 24.4 per cent in orders from the eurozone, according to official figures. Production fell for the third month in a row.
Experts predict that global economic growth will remain “subdued” in 2024. Germany as an exporting country will receive “little impetus” from its trading partners, the Macroeconomic Policy Institute (IMK) said in late September.
Although German imports are to rise by 1.8 percent next year, exports are expected to grow only slightly, by 0.5 percent in 2024, according to IMK.
Europe’s largest economy is concerned about its international competitiveness. According to a recent study by the German Economic Institute and Frontier Economics, without political countermeasures, high energy costs could cause a welfare loss of up to 4.5 per cent over the next 15 years.
If Germany continues on its current course, the country will be “pushed further backwards in international competition,” Siegfried Russwurm, president of the Federation of German Industries, warned last week. He called for greater financial relief for the industry.