German Machine Tool Industry on Course for Record Year

According to the VDW (German Machine Tool Builders' Association), orders received by the German machine tool industry in the third quarter of 2018 were two percent down on the same period last year. Orders from Germany fell by one percent whereas those from abroad were down by two percent. Orders increased by seven percent in the first nine months of the year. Domestic orders grew by 20 percent, while foreign orders rose by one percent.

The global economy is slowing, with growth having stalled in the markets outside the euro zone. Although, the strong domestic demand in the second half of 2017 is now leading to a fall in total order levels. And finally, global developments—trade conflicts, increasing protectionism, rising oil prices, inflation in various emerging markets—are unsettling customers, especially small- and medium-sized enterprises.

Employment and capacity utilization continuing to soar

Accounting for almost 73,700 employees in August of this year, the workforce remains at record levels. At 95 percent, there was almost full capacity utilization in October 2018. The last time such high levels were posted was in July 2012. 

Production at record levels

Overall, sales rose by 13 percent in the first nine months, according to the association's survey. The strong growth has prompted the association to raise its production forecast by a further percentage point. The VDW now expects production to grow by eight percent to over €17 billion in 2018. However, metal cutting equipment, which boomed last year, is now growing much more slowly while forming equipment is boosting growth.