The decline in orders in the machinery and plant engineering sector continues. In May, orders fell by 10 percent in real terms, according to figures released by the German Engineering Federation (VMDA). The 18 percent drop in demand from abroad is particularly alarming.
Decline well below previous year's level
Order intake in the machinery and plant engineering sector also remained well below the previous year's level in May. Orders fell by 10 percent overall in real terms. Demand from abroad fell by 18 percent. By contrast, domestic orders increased by 9 percent. There were 36 percent fewer orders from the euro zone in the month under review, and 9 percent fewer from non-euro countries.
"Our picture of persistently weak global investment demand is confirmed. The order cushions for the coming months are still large enough, but there is a growing number of companies that are sensing a clear change here," explains VDMA Chief Economist Dr. Ralph Wiechers.
Orders fell by 12 percent year-on-year in real terms in the less volatile three-month period from March to May 2023. Domestic orders were down 6 percent, while foreign orders were down 15 percent. Euro countries remained 23 percent below the previous year's level. The drop from non-euro countries was 11 percent.
Poor sector performance
The downward trend of recent months thus continued in May.
"Without large-scale plant business, there would also have been a large drop in domestic orders. Our picture of persistently weak global investment demand is confirmed," says Dr. Ralph Wiechers.
At 57 percent of companies, order backlogs have fallen slightly or even sharply in the last three months, according to a flash survey conducted by the association. Companies are increasingly sensing change and rate the continued weakness in global investment demand as a cause for concern.
