Slight relaxation ensures a positive mood

The VDMA Regional Association for Eastern Germany surveyed its approximately 350 members about the mood. According to the survey, almost two thirds of eastern German mechanical engineering companies assess their current overall situation as positive. Around half of the mechanical engineering companies registered fewer orders towards the end of the year than three months previously.

This affected companies with a positive and negative business situation in equal measure. "We have to bear in mind that several years of growth with an above-average order situation are behind us. This normalization alone is leading to fewer orders," explains Köhn.

Nevertheless, companies were able to improve their production capacity utilization compared to the previous quarter; the average capacity utilization rate rose by 1% to 86%. Meanwhile, the order backlog remained virtually unchanged and will last until mid-May 2020 on average.

Positive outlook

Although the global political crises and trade disputes, the cyclical downturn in the global economy and technological change in the automotive industry and energy sector continue to create difficult conditions, eastern German machinery and plant manufacturers are in a good mood. 14.5% rate their current business situation as very good, 48.2% as "rather good" and 37.4% as "rather poor". Around a fifth of companies expect business opportunities to improve by March 2020, 6% more than previously. More than half of all companies expect business to remain the same.

"We cannot influence political developments. And hardly any company can completely escape the difficult environment. It is therefore optimistic that eastern German mechanical engineering companies have given up their reluctance to invest. It is now important to invest in new business models, products and services, especially in view of alternative drive trains and climate protection," emphasizes Köhn, Managing Director of the regional association. The structural changes are currently painful, but in the long term the technological change will open up a wide range of opportunities.

Short-time work hardly widespread

The issue of short-time working also played a rather subordinate role towards the end of the year. Companies responded to the declining order situation by reducing employees' overtime and vacation accounts.

Around a quarter of companies plan to hire new employees by mid-2020. A further 54% would like to maintain the same number of employees. However, the shortage of skilled workers remains a problem: many companies were unable to fill vacancies for engineers and skilled workers. However, the proportion has fallen by 20 percentage points since the beginning of 2018 to 62%.