German machinery makers grow more upbeat, but more than 30% plan job cuts
A VDMA survey shows 34% of firms rate their situation as good. But more than 30% say they will have to cut jobs, and around 100,000 positions have been lost since 2019.
Graphic: TERRA WORLD NEWS (own graphic based on the sources listed)
Sentiment in Germany’s machinery and plant engineering sector is improving. In a survey of almost 800 companies by industry association VDMA in early October, 34% rated their current situation as good or very good, up from 28% in July. Some 22% called it bad or very bad. Looking six months ahead, 33% expect an improvement, up from 25% in July, while only 10% expect conditions to worsen.
Support is coming from smaller customer industries such as defense, aerospace and medical technology, while electrical and electronics firms are benefiting from heavy investment in artificial intelligence, the VDMA said. Business with the chemical industry remains difficult, and the crisis in the auto industry is weighing on robotics and automation. Some 57% of firms expect nominal sales growth this year and 62% next year. In real terms, the association forecasts a 2% drop in output in 2026, a fourth straight annual decline, and 3% growth in 2027. Real orders in August were 5% lower than a year earlier.
Job cuts are set to continue: more than 30% of companies say they are forced to reduce staff, 18% plan to hire and 52% expect a stable core workforce. VDMA chief economist Johannes Gernandt sees reason for “cautious optimism” but said the environment remains tough because of geopolitical crises, strong competition from China and high costs in Germany. “Since 2019, around 100,000 jobs in machinery and plant engineering have been lost in Germany,” he said.