CAPTION: Slump in orders for Germany's mechanical engineering companies. (picture alliance/dpa/Felix Kästle)
Germany's machinery and plant manufacturers are continuing to struggle with customer cautiousness. In February, new orders adjusted for price increases (in real terms) were 17 percent below the previous year's level, according to the Mechanical Engineering Industry Association (VDMA) in Frankfurt. "The decline can be explained in particular by the fact that the economic situation continues to be characterized by numerous challenges, which is causing restraint among many investors," explained VDMA economic expert Olaf Wortmann.
In addition, according to the data, there were a particularly large number of orders in the same month of the previous year. "This set the bar high for order intake in February this year," Wortmann said. In the less volatile three-month period December 2022 to February 2023, orders fell 17 percent in real terms compared to the same period last year.
In 2022 as a whole, a slump in orders in the final quarter had pushed the annual balance sheet of Germany's export-oriented key industry, which employs more than one million people, into the red: incoming orders were ultimately 4 percent below the previous year's figure in real terms. For the current year, the VDMA expects a slight decline in production of 2 percent in real terms, according to earlier information.
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