VDMA: Moderate drop in orders at the end of the year

The decline in orders in the mechanical and plant engineering sector slowed slightly in December 2023 - but the bottom line is still a double-digit drop in orders for the year as a whole. Overall, orders in 2023 as a whole were 12 per cent down on the previous year in real terms, and there is still no sign of a turnaround. "In the major sales markets of Europe, the USA and China, there is a lack of confidence in a lasting global economic upturn, which the capital goods industry in particular would need," commented VDMA Chief Economist Dr Ralph Wiechers on the annual order figures. Domestic companies recorded an 11 per cent drop in orders in 2023, while orders from abroad fell by 13 per cent. The drop in orders from euro countries was 16 per cent, while non-euro countries recorded a decline of 11 per cent.

Nevertheless, December 2023 was not as bad in itself, with incoming orders at the end of the year only down by a single-digit percentage on the previous year at minus 6 per cent in real terms. "This was due to customers from non-euro countries, whose orders actually rose slightly by 1 per cent," explains Wiechers. As a result, the decline from abroad as a whole was comparatively moderate at 3 per cent compared to the previous year. However, double-digit declines were also recorded in Germany (minus 13 per cent) and from the euro countries (minus 11 per cent) in December.

In the less volatile three-month period from October to December 2023, companies recorded a drop in incoming orders of 9 per cent in real terms compared to the previous year. Domestic business (minus 15 per cent) recorded much sharper declines than foreign business (minus 6 per cent). The euro countries ordered 4 per cent less machinery and equipment during this period, while non-euro countries reduced their orders by 7 per cent. "Looking at the curve, there are signs that foreign orders are bottoming out. Domestic orders, on the other hand, are still on a downward trajectory. It is therefore clearly too early to sound the all-clear," summarises the VDMA chief economist.