For the first six months of the current financial year, the German mechanical engineering industry has reported a 9% decline in incoming orders compared to the previous year. The drop is the same in Germany and abroad. According to VDMA economic expert Olaf Wortmann, the reasons are well known: "This decline is due to the weaker global economy, the numerous mostly politically motivated upheavals and the far-reaching structural change in the automotive industry." The VDMA already lowered its production forecast for 2019 in the spring, citing the same reasons.

According to the VDMA, incoming orders in the German mechanical engineering sector in June fell short of the previous year's level by 5% in real terms. While domestic orders fell by 16% in the month under review, orders from abroad were able to maintain their already high level from the previous year. "The number of large orders from non-euro countries is surprising. It was already high in June 2018 and has now risen again, resulting in a 2% increase in orders from non-euro countries. It is extremely rare that an already high level from the previous year can be maintained, let alone increased," said Wortmann. In contrast, machine manufacturers recorded a 9 percent drop in orders from the eurozone in June.

According to the VDMA, the weakening mechanical engineering sector was particularly evident in the three-month period from April to June 2019, as orders fell by 8% compared to the previous year. Domestic orders fell by 12%, while foreign orders dropped by 6%. Orders from euro countries fell by 7% and orders from non-euro countries by 5%.

VDMA calls for free trade agreement

Ulrich Ackermann, Head of Foreign Trade at the VDMA © VDMA

It was only on Saturday that Ulrich Ackermann, Head of Foreign Trade at VDMA, called for a free trade agreement between the EU and the USA. Ackermann: "By concluding this agreement, the EU has once again shown its good will to put an end to long-standing trade disputes such as the one over beef imports. However, further steps must now follow. Above all, we are calling for a lean free trade agreement between the EU and the USA that removes all industrial tariffs and eases technical barriers to trade. This would put the vexed issue of bilateral tariffs to bed once and for all. The complete elimination of customs barriers would lead to cost savings of 900 million euros in the European mechanical engineering sector alone. On the other hand, the US President's supposed joke during his appearance yesterday that the next step would be to impose a 25% tariff on cars from the EU must under no circumstances become painfully serious!"

The reason for the demand was the recently concluded meat agreement, according to which 35,000 tons of beef in the EU are to come from the USA in future. This corresponds to 80 percent of the total import quota.