Automation Market

German Machinery engineering 2% decline expected in 2023

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The machinery and plant engineering sector has remained on course in the unexpectedly heavy seas of 2022. A real production increase of 1 percent is still in sight. A slight minus of 2 percent is expected for 2023. This is a far cry from the setbacks of earlier years.

The mechanical and plant engineering industry has stayed on course with a great effort in the unexpectedly heavy seas of 2022 and looks to the coming year with some confidence. «

High inflation and the Ukraine war with all its consequences will also continue to weigh on our industry for a long time. Material bottlenecks and difficulties in the supply chain continue, and more and more countries are returning to protectionist measures. The companies in the machinery and plant engineering sector have once again demonstrated their innovative strength and adaptability by making use of their entrepreneurial freedom,» said VDMA President Karl Haeusgen at the association’s annual press conference.

«We are therefore confident of achieving our target of 1 per cent real production growth this year and are also sticking to our forecast for the coming year. We continue to expect a slight real output decline of 2 per cent in 2023. This is a far cry from the setbacks of previous years and demonstrates the robustness of our industry.»

In particular, the goal of a climate-neutral economy is a great opportunity for medium-sized mechanical and plant engineering companies and their innovative technologies. «A prerequisite for this, however, is that companies can rely on a reliable and affordable supply of materials and energy. Here, the EU and the German government are called upon to keep the markets open and to implement all necessary measures quickly and with as little bureaucracy as possible,» Haeusgen warned.

Bottlenecks in supply chains still exist, but slightly easing

Production in the machinery and plant engineering sector continues to be noticeably impaired by difficulties in the supply chains and by material bottlenecks. According to the latest VDMA flash survey from the beginning of December, in which more than 600 member companies took part, 74 percent of the companies see their business activity seriously or noticeably impaired by such bottlenecks. In June, however, the figure was 87 per cent. In the latest survey, the companies reported a noticeable easing of the situation with regard to chemicals, plastics and metal products.

The situation for electronic components, on the other hand, remains tense, albeit with a downward trend. According to VDMA economists, this development may have a positive impact on production in the final months of 2022. From January up to and including October, real production in the mechanical and plant engineering sector was still 0.4 percent below the previous year’s figure. Order intake in the first ten months of the year remained 1 per cent below the previous year in real terms, while the order reach in September 2022 was still 11.9 months and thus remains very high.

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