Mechanical engineering sector
VDMA: Export business defies trade policy storms
Mechanical engineering companies in Germany successfully defied the growing uncertainties in the export business in the first half of 2018. In the first six months of this year, machine deliveries increased by a nominal 4.3% or 3.5 billion euros to 86.7 billion euros.
According to the VDMA, exports rose by 5.9% in the same period of the previous year and by just under 8% in 2017 as a whole. "The threat and introduction of tariffs or extraterritorial sanctions naturally unsettles many investors. However, this is only reflected in the mechanical engineering sector with a certain delay, as many customer projects are planned for the long term and orders that have already been placed have a lead time of several months. In addition, German mechanical engineering technology continues to be in high demand in many countries in order to drive forward modernization there," explains VDMA Chief Economist Dr. Ralph Wiechers.
USA remains most important export market
The USA remained the most important export market for machinery deliveries from Germany in the first half of 2018 - just ahead of China. Exports to the United States increased by 5.5% to 9.26 billion euros. Exports to China increased by 12% to 9.23 billion euros. This means that 10.7% of all machinery deliveries from Germany went to the USA, while China's share increased to 10.6%.
France (up 1.6% to 5.66 billion euros), Italy (up 12.5% to 4.15 billion euros) and the UK (up 0.7% to 3.74 billion euros) followed at some distance behind. Exports to EU countries as a whole increased by 3.4% to 40.76 billion euros.
Significant drop in Turkey exports
The export business to Turkey recorded a significant drop in the first half of the year, falling by 6.6% to EUR 1.79 billion. "This is probably just a first taste of what is to come. The rapid decline of the Turkish lira is making it much more expensive for our Turkish customers to purchase machinery," warns Wiechers.
Turkey ranks 14th among the most important customer countries. Machine deliveries to Mexico also fell significantly by 8.7% to 1.42 billion euros, although they had also risen particularly sharply in 2017. Business with Russia (up 11.7% to 2.88 billion euros) and India (up 10.2% to 1.6 billion euros) developed well in the first six months.
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