Order bookings in German machine tool industry fall 13% in H1

In the second quarter of 2012, order bookings in the German machine tool industry fell by 20 percent year on year, according to the German Machine Tool Builders' Association (VDW). Given the dominance of the German industry in the mechanical engineering sector, data released by the VDW are seen as a barometer for general business conditions in the EU.
 
Domestic orders in Germany in the second quarter this year decreased eight percent, while export orders fell by 26 percent, both compared to Q2 2011. In the first six months of this year, Germany's order bookings fell by 13 percent compared to the equivalent period of 2011. Domestic orders in this period were down by six percent and export orders by 17 percent, both on year-on-year basis.
 
In Germany, the machine tool industry has a broad customer base. The automotive industry and its components suppliers, in particular, are investing in new generation models and fuel-efficient technologies. The moderate fall in orders during the year's second quarter is attributable to one-off effects from large orders for forming technology.
 
"The months April to June have shown that the machine tool industry cannot disengage from global macroeconomic developments," said Dr. Wilfried Schäfer, executive director of the sectoral organisation at the VDW. However, he added, the preceding year's second quarter saw the steepest rise in export orders during the entire year, so that the comparatively high decrease in orders from abroad also reflects a base effect. For the year's second half, the VDW expects orders from abroad will stabilize once more.
 
The capacity utilization in July of this year was at 96.9 percent, rising in comparison to 95.1 percent recorded in April this year. The order backlog was 8.4 months in June, following 8.7 months in February. The VDW is forecasting growth of six percent in production for the current year. Although the macroeconomic situation has become significantly more problematical in recent months, due to the euro debt crisis and its effects on the global economy with investors also unsettled, machine tool production output is set to keep on growing this year, said Dr. Schäfer.