Dr. Wilfried Schäfer, Executive Director of the VDW (German Machine Tool Builders’ Association), Frankfurt am Main, Germany

FRANKFURT – In the first quarter of 2013, order bookings in Germany’s machine tool industry fell by 19 per cent compared to the equivalent quarter of 2012. Domestic orders were down by 21 per cent, while orders from abroad dropped by 18 per cent.

“Demand for machine tools is still lacking momentum”, said Dr. Wilfried Schäfer, Executive Director of the industry association VDW (German Machine Tool Builders’ Association) in Frankfurt.

The weak start to the year, he said, signals a perceptible degree of scepticism, not least by mid-tier customers in Germany.

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Order bookings in metal-cutting applications, for instance, with a broadly diversified customer base, remained 26 per cent down on the preceding year’s figure. In forming technology, by contrast, which is dominated by project business with the automotive industry, orders are still running at the previous year’s level.

“The year’s second half now has to provide a counterweight, if the predicted growth in production output of one per cent is not to be put at risk”, said Schäfer.

Expectations in Germany were focused on the expanding markets of Asia and particularly China, which is the biggest market for the German machine tool industry. There, faster economic growth is again being forecast.

Its also predicted that North America will remain a stable market this year, which is welcome news as it has retaken its role as a vital supporter of the sector.

Also, Russia is emerging as a possible customer because of its substantial need for modernization in its domestic industrial sector.

There are also rays of hope from the international automotive industry, which is deploying strategic investments in the battle for market shares, and from the aircraft industry and the mechanical engineering sector. All of them intend to be making above-average capital investments in 2013.

The German machine tool industry ranks among the five largest sectors in the country’s mechanical engineering segment.

It supplies production technologies for metalworking applications to all categories of manufacturer, and makes a crucial contribution towards progressing innovation and productivity in the industrial sector overall.

Due to its  key position for industrial production output, its development is also an important indicator for Germany’s industrial sector as a whole.

In 2012, the German machine tool industry produced machines and services worth around 13 billion euros, and employed 70,900 people.

Order bookings and turnover in the German machine tool industry. (Click to enlarge)