German machine and plant manufacturers report further decline in orders
German machinery and plant manufacturers ended the first half of the year with another decline in orders. In June, orders fell by a real nine percent compared to the same month last year, as reported by the industry association VDMA on Thursday. Orders from within Germany decreased by eight percent, while international demand fell by ten percent. Orders from Eurozone countries decreased by twelve percent, and those from the rest of the world by eight percent.
VDMA chief economist Ralph Wiechers summarized the results as "overall disappointing". "There is no sign of a turnaround yet, and what's more, the economic stabilization that was initially indicated at the beginning of the year has recently taken a setback."
For the first half of 2024, there was a real decrease of twelve percent in order intake compared to the same period last year. From January to June, domestic orders fell by 18 percent, while international orders decreased by nine percent. "To prevent initial signs of a cyclical recovery driven by exports, particularly in Germany, from being derailed, a consistently supply-oriented policy for more investments and innovations is needed," said the VDMA chief economist. "Some helpful measures are already included in the growth initiative of the federal government. We must continue to persistently move in this direction."
Overall, the German economy looks back on a weak first half of the year. While there was growth of 0.2 percent in the first quarter, the economy shrank by 0.1 percent in the second quarter. In comparison, the Eurozone as a whole achieved growth of 0.3 percent in the spring, despite the weakness of its largest economy.
The German machinery and plant manufacturing sector, despite being a major contributor, also experienced a decrease in orders from within Germany and internationally, as noted by the VDMA. German machines and equipment continue to be in demand globally, with countries like the Eurozone and the rest of the world placing orders, albeit with a decrease in demand.
