Markets Germany: Project business in China boosts demand for machine tools

Editor: Barbara Schulz

In the first quarter of 2016, order bookings in the German machine tool industry rose by 8% compared to the first quarter of 2015.

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German machine tool industry: Demand boosted by foreign orders, in particular from China.
German machine tool industry: Demand boosted by foreign orders, in particular from China.
(Bild: VDW)

While domestic order bookings stagnated, orders from abroad showed a steep rise of 11%, the German Machine Tool Builders' Association (VDW) said.

“In comparison to the cautious first quarter of 2015, demand for machine tools is currently showing a healthy increase,” commented Dr Wilfried Schäfer, executive director of VDW. "The growth in demand results primarily from a substantial rise during the month of March, and here in particular from a double-figure rise in orders from non-European foreign countries."

The crucial factor here is good project business in China, VDW said, where it was predominantly machining centres which accounted for positive one-off effects. “The Chinese market is and remains important for us. This is very clearly evidenced by the latest figures," Schäfer said. "The transformation process in China’s industrial sector, driven by technological upgrading, is far from completed and can be expected to offer potential in terms of order bookings for German manufacturers."

While last year the Eurozone was the driving force behind demand for German machine tools, in the first quarter of 2016 the region recorded a decrease in orders of 14%. This comparatively substantial decrease can be explained not least by marked baseline effects from the preceding year’s strong figures, Schäfer said. “Europe’s industrial sector invested substantially in 2015, and now, following a boom phase, is taking a breather.” Meanwhile, the German machine tool manufacturers reported an impressive plus of 18% from the non-eurozone countries in Q1 2016.

Domestic business fell to 17% in March, and failed to build on the good figures of the two preceding months, VDW said. As a result, the German machine tool industry finished the first quarter of 2016 with break-even on domestic order bookings.