The decline in orders in the mechanical and plant engineering sector continues. According to the Verband Deutscher Maschinen- und Anlagenbau (VDMA), orders fell by 10 per cent in real terms in May. Particularly alarming: the 18 percent drop in demand from abroad.
Decline in orders for machinery and plant construction in May well below previous year’s level
Also in May, orders received in the machinery and plant construction sector remained clearly below the previous year’s level. Overall, orders fell by 10 percent in real terms. Demand from abroad fell by 18 percent. Domestic orders, on the other hand, rose by 9 percent. In the month under review, 36 per cent fewer orders came from the euro area and 9 per cent 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 the number of companies that are sensing a clear change here is increasing,” says VDMA chief economist Dr Ralph Wiechers. In the less volatile three-month period from March to May 2023, orders fell by 12 percent in real terms compared to the previous year. Domestic orders were down 6 percent, while foreign orders were down 15 percent. The euro countries remained 23 per cent below the previous year’s level. The minus from the non-euro countries was 11 per cent.
Worrying development in the industry
The downward trend of the past months thus continued in May. “Without large-scale plant business, there would also have been a high decline in domestic orders. Our picture of persistently weak global investment demand is confirmed,” explains Dr Ralph Wiechers.
According to a flash survey by the association, 57 percent of companies have seen their order backlogs decline slightly or even sharply in the last three months. Companies are increasingly sensing changes and rate the ongoing weakness in global investment demand as worrying.
For more information, click here.
