Germany’s mechanical engineering sector recorded a steep 19 percent year-on-year drop in new orders in September 2025, reflecting ongoing strain from the global trade crisis and weakening industrial demand, according to the German Engineering Federation (VDMA).
The decline also contributed to a slight contraction in total orders for the first nine months of the year.
Base effects mask deeper structural weakness
VDMA chief economist Dr. Johannes Gernandt said that part of the year-on-year decline stemmed from base effects, as September 2024 had benefited from large-scale plant orders that did not recur this year. “That should not obscure the fact that the machinery and equipment manufacturing industry continues to experience a noticeable slump in demand and underutilization,” Gernandt warned.
He stressed that a sustainable recovery depends on resolving global trade disputes, including US punitive tariffs, and on structural reforms in Germany and Europe to reduce cost burdens and stimulate investment.
The federation reaffirmed its forecast of a five percent contraction in real production for 2025.
Foreign demand collapses, euro zone more resilient
The September 2025 figures show a five percent drop in domestic orders and a 24 percent drop in foreign orders. Orders from euro zone countries fell by 13 percent, while those from non-euro zone countries decreased by 27 percent.
In the third quarter of 2025, overall orders were six percent lower than a year earlier, with domestic orders down by three percent and foreign orders down by seven percent, while orders from euro zone countries and non-euro zone countries fell by two percent and by nine percent, respectively, all on year-on-year basis.
In the January-September period of this year, total orders edged down by one percent compared with the same period last year, while euro zone orders increased by 10 percent and non-euro zone demand fell five percent, both on year-on-year basis.