Around a third (31%) of companies in the mechanical and plant engineering sector rate their current situation as poor or very poor. 29 percent rate the situation as good or very good. This is the result of the VDMA’s latest economic survey, in which 932 member companies took part in June. “This means that the picture has recently tended to turn negative. In the second quarter, more companies were pessimistic than optimistic. In the spring, the majority of companies were still more optimistic, albeit by a small margin,” says VDMA Chief Economist Dr. Ralph Wiechers.

Consequently, companies are also somewhat more pessimistic with regard to 2024 as a whole. Around 40 percent expect a nominal decline in turnover in the current year, while a further 23 percent expect their turnover to stagnate. Respondents were still more confident about the coming year. More than half see a nominal increase in sales in 2025 as realistic. “Quite a few companies had pinned their hopes on a positive second half of 2024. However, measured in terms of incoming orders, these hopes have not been fulfilled for many. Companies therefore had to revise their estimates downwards,” explains Dr. Wiechers. What’s more, almost a third (29%) of companies consider their order situation to be a major or very major risk with regard to the next six months.

The sales opportunities are assessed inconsistently. The situation in the USA remains positive. 41% of companies there see their current sales opportunities as good or even very good. Around one in three companies even expects an improvement in the next six months. China and Germany, on the other hand, are only rated positively by around one in five companies in terms of their current sales opportunities.

The ongoing phase of economic weakness is also having an impact on the demand for labor from mechanical engineering companies. 46 percent of companies stated that they would like to reduce the number of temporary workers in the next six months. However, around two thirds of companies would like to keep their core workforce constant. “Companies are only too aware of the demographic trend and the associated labor shortage in the coming years. Many companies will therefore retain their employees wherever possible,” emphasizes Dr. Wiechers. One tried and tested means of achieving this in Germany is short-time working, which is already being used in some companies or is increasingly being considered. The number of short-time workers in the mechanical and plant engineering sector is likely to increase further in the coming months.

Due to the persistently challenging conditions, the feedback from companies shows a clear reluctance to invest. 36% of those surveyed expect their nominal investments to stagnate in the current year, while a further 22% even anticipate a decline. However, the willingness to invest could increase again next year, as the results suggest. More than half of the companies expect investment to grow. “There are plenty of reasons to invest in view of the far-reaching transformation in mechanical engineering and its customer industries. However, an increase in investment requires good investment conditions, i.e. planning security and reliable economic and political framework conditions. This realization has also reached politicians. Now it is time to finally get serious about improving the supply conditions for investing and innovative companies,” explains the VDMA chief economist.