The German mechanical and plant engineering industry continues to face headwinds, though signs of improvement are emerging, according to a new survey by the German Engineering Federation (VDMA).
Of the 936 companies surveyed, only 26% described their current business situation as good or very good, while 32% rated it as poor or very poor. More than half expect no major changes in the coming six months. Still, 29% of respondents are cautiously optimistic about the second half of the year.
Sales expectations remain muted. Just 42% of companies anticipate nominal turnover growth in 2025, compared with 30% expecting declines and 28% forecasting stagnation. Looking further ahead, 58% of respondents believe that sales growth will return in 2026.
“The mood in the mechanical and plant engineering sector remains tense due to trade tensions and geopolitical conflicts, as well as the resulting high level of uncertainty worldwide,” said VDMA Chief Economist Dr. Johannes Gernandt. “Companies are cautiously optimistic about the second half of the year. The bottom line is that the current year is likely to be mixed for the majority of companies and sales growth will not return until 2026.”
Regional markets show diverging trends. North America remains a key pillar, with 31% of respondents citing good to very good opportunities, despite ongoing trade disputes. The Near and Middle East is also viewed positively. In contrast, Germany was described as weak by 43% of respondents, while 41% gave a negative assessment of China, compared to only 20% who reported positive conditions.
Employment plans also reflect a mixed picture. While 27% of companies are preparing further job cuts, 29% expect a reduction in short-time work, signalling a gradual return of demand. “Companies are increasingly bringing their employees back from short-time work in order to process incoming orders again, which raises hopes that job cuts will slow down somewhat in the coming months,” said Florian Scholl, Economics and Statistics Officer at VDMA.
