The mechanical and plant engineering sector in eastern Germany is not being affected by the increasing political and economic tensions at home and abroad and is also reporting positive results for the second quarter of 2018. Most are also confident about the future. This was the result of a survey of the 350 members of the VDMA Regional Association East in Berlin, Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia.

According to the survey, 91% of companies rate their economic situation as very good or good. "The business situation of eastern German mechanical engineering companies has improved continuously over the past two years. Due to the growing trade barriers, we had not expected this momentum to continue so emphatically," explains Reinhard Pätz, Managing Director of VDMA East.

Production at full capacity, order backlog available

On average, companies utilized almost 93% of their existing production capacities; the last time the order situation was this good was in 2007 and 2008. Large parts of the industry benefited from the good order situation: 74 out of 100 companies achieved a capacity utilization rate of at least 90%. Only in a few cases was this below 80 percent.

Companies are also pleased with the good level of incoming orders: on average, companies can plan for almost six months of production. 85% of companies registered more or the same number of orders compared to the previous quarter.

Lack of skilled workers

The good order situation is also reflected in personnel plans. Almost 57% of companies want to keep the number of employees stable over the next six months, while around 38% of companies are also planning to hire new employees. The only thing missing is skilled workers: At the moment, four out of five companies are having difficulty filling vacancies. Demographic developments are contributing to this, and some regions are also at a disadvantage due to a comparatively unattractive infrastructure, explains association managing director Pätz. "However, companies are also complaining about insufficient qualifications and a lack of motivation and willingness to travel on the part of applicants," Pätz continues.

No influence from trade disputes

The trade dispute, geopolitical tensions, the uncertain outcome of the Brexit negotiations and German federal politics have so far had little impact on developments in the eastern German mechanical and plant engineering sector. However, these developments could dampen further growth impulses and noticeably slow down the success of companies. Nevertheless, the mood in the region is good: around 15 percent of companies expect the upward trend to continue over the next three months. A further 78% of companies expect business to remain the same. "This confidence is supported by full order books. There also seems to be hope that political reason will ultimately gain the upper hand in the conflicts," says Managing Director Pätz.