Machine Tool Orders from Germany Have Doubled

In the third quarter of 2010, order bookings in the German machine tool industry showed a dramatic uptrend. With a 117% increase, order bookings reflected three-figure growth for the first time ever since statistics have been kept. Sales continue to be driven by demand from abroad, up by 128%. Domestic order bookings rose by 99%, but most recently in September they drew level with export demand.

In the period from January to September 2010, overall demand was up 77% on the preceding year’s equivalent figure. Domestic customers ordered 69% more on a like-for like basis, while the figure for customers abroad was 82%.

“The good news is this: the upturn is gaining in strength. Production output in the major German customer industries is picking up speed”, reports Dr. Wilfried Schäfer, Executive Director of the VDW (German Machine Tool Builders’ Association) in Frankfurt. But he warns against euphoria. “Gratified as we are by the impressive growth figures, the comparison with the preceding year is a misleading one. It is more realistic to draw a comparison with the results in 2008. Then in the third quarter we’re 20% down on a like-for-like basis, and over the year as a whole we’re even 40% down.”

Capacity utilisation continues to make huge upward strides. At 85.9% in October, it is once again close to the long-standing mean figure. Thanks to the flood of orders, existing production lines are being better utilised. In some case, however, capacities are being downsized. The order backlog in June was 6.9 months. Companies are reporting bottlenecks for important outsourced components. At the end of the year’s third quarter, there were 64,300 people employed in the German machine tool sector. This signals a slow uptrend in comparison to the nadir reached in summer this year.