"We are assuming that we have bottomed out at a low level, as incoming orders are currently experiencing a lateral movement," said Dr. Markus Heering, Executive Director of the VDW (German Machine Tool Builders' Association) in Frankfurt am Main, commenting on the results. Orders from abroad in particular are currently being supported by automation, digitalization, service, retrofitting and sustainability.

Customers from the defense industry, aviation and medical technology in particular are currently investing. "The former are expanding their capacities due to the high demand. This is also supporting suppliers of electronics, metal and precision components as well as mechanical engineering," explains Heering. However, it will still be a few months before the orders go into production. By contrast, the key customer sectors of the automotive and supplier industries remain weak.

Regional differences in demand

Demand varies from region to region. Europe is currently doing well, particularly Turkey, Italy and Spain, as well as Eastern Europe - especially the Czech Republic, Poland and Hungary. By contrast, other important markets such as China, South Korea, the USA and Mexico are showing signs of a slowdown.

"The continuing uncertainty in the global economy due to US tariff policy and the very slow progress of reforms in this country are still slowing down domestic investment," explains Heering. In addition, factors such as the structural change in the automotive industry, the ongoing competition with Asian manufacturers and headwinds from the currency side are weighing on demand, as the euro has appreciated against the US dollar and yen.

Sales development and outlook

In the first nine months of this year, turnover in the machine tool industry was down 7 percent. For the coming year, however, Europe - and Germany in particular - is expected to develop from its previous Achilles heel into a driving force if the announced investments in defense and infrastructure take effect.

Machine tool industry is one of the largest specialist sectors

The German machine tool industry is one of the five largest branches of mechanical engineering. It supplies production technology for metalworking to all branches of industry and makes a significant contribution to innovation and productivity progress in industry. Due to its key position in industrial production, its development is an important indicator of the economic dynamics of the entire industry.

In 2024, the industry produced machines and services worth around EUR 14.8 billion with an average of around 65,500 employees (companies with more than 50 employees).

Source: German Machine Tool Builders' Association VDW