Germany machinery sector to see fourth year of decline
BERLIN: Germany’s machinery and equipment industry is expected to shrink for a fourth consecutive year in 2026, with production forecast to fall 2percent in real terms, the VDMA said on Thursday, cutting its earlier forecast of stagnation. The downgrade reflects weak output this year, with production down 4.1percent in the first seven months from a year earlier, despite signs that demand was…
Germany's machinery and equipment industry is set to experience its fourth year of decline in 2026, according to the VDMA, which has revised its forecast downward from stagnation to a 2percent real terms reduction. The organization cut its earlier prediction as weak output this year comes in at 4.1percent below the previous year in the first seven months, despite indications of improving demand.
However, VDMA chief economist Johannes Gernandt remains optimistic, stating that 2027 should see a turning point with real production growth of 3percent. The improved order situation and slightly brighter expectations signal a potential rebound in production for that year. Price-adjusted orders rose by 5percent in the first seven months of 2026, propelled by a 14percent surge from non-euro zone countries.
While business expectations have improved, domestic demand remains subdued, and the recent improvement in production has yet to spread throughout the broader machinery sector, thus limiting near-term production prospects.
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