In the second quarter of 2021, incoming orders in the German machine tool industry rose by 103% compared to the same period last year. Domestic orders increased by 81%. Foreign orders were up 114% on the previous year. In the first half of 2021, orders from German suppliers rose by 57%. Domestic orders were up 38% on the previous year, while foreign orders were up 68%.
"The industry has achieved the turnaround with considerably more momentum than originally assumed and is recording a strong increase in orders despite some delivery difficulties," commented Dr. Wilfried Schäfer, Executive Director of the VDW (German Machine Tool Builders' Association), Frankfurt am Main, on the result. Although the very high growth rates can also be explained by the weak comparative figures for the coronavirus year 2020, the order volume has recovered noticeably and, at 4 percent, is only slightly below the pre-coronavirus level of 2019. The development is also broad-based and shows the great pent-up demand among investors from all over the world.
Foreign countries continue to be the current drivers. Asia continues to be characterized by high demand from China, which accounts for two thirds of the Asian order volume. US business is beginning to recover. There are increasing signs that orders from there will pick up more strongly in the future. Europe has also woken up noticeably. Fiscal policy measures in particular are supporting demand with investment promotion programs. Austria and Italy are prime examples. The domestic market is following suit with a time lag. Overall, however, the level of the top years 2017/2018 is still a quarter away.
"Without the bottlenecks and price increases for suppliers, e.g. for electronics, steel and sheet metal, we could have done even better," Schäfer sums up. Against the backdrop of an intact recovery of the global economy, however, a further increase is expected. This is already having an impact on production in the current year. Due to the significant increase in orders, Oxford Economics, the VDW's forecasting partner, has put production growth at 8 percent, two points higher than in the spring. This would put the volume for the current year at 13.2 billion euros. "However, there is still some way to go before we reach the top result of 2018/2019," says Schäfer. Back then, the sector achieved a result of 17 billion euros.
Employment, a lagging indicator in economic development, is still declining. In June, the sector employed almost 8 percent fewer people than in the previous year. That was around 64,200 women and men. Short-time working has largely come to an end. "Nevertheless, we are also concerned about the shortage of skilled workers, as our industry is facing major challenges. Keywords include the transformation in the automotive industry, the energy transition and digitalization. To overcome these challenges, we need people who are capable of doing so," concludes Schäfer.
