Germany's mechanical and plant engineering companies witnessed a further rise in new orders in August, a report published on Thursday by the German Mechanical and Plant Engineering Federation (VDMA) shows.
According to the report, price-adjusted new orders in August increased by 7 percent compared to the same period last year. The development was largely attributed by VDMA to unusually strong domestic demand during the last month.
The value of domestic orders soared by an annual 8 percent in August, and thus ahead of international orders which rose at a slightly slower pace of 6 percent. "This is due to demand from eurozone partner countries which stagnated in August," VDMA chief economist Ralph Wiechers explained. Wiechers noted, however, that orders from non-eurozone countries were also up by 8 percent in August.
Between June and August, German engineers have recorded average real order growth of 8 percent. In the course of the three months, domestic orders grew by 10 percent, while foreign orders increased by 7 percent.
The mechanical and plant engineering sector has recently lowered its expectations for 2019 after benefiting from a booming global economy in past years and resulting demand from export-oriented German industrial manufacturing companies. In light of swelling international conflicts over trade and uncertainties surrounding Brexit, the VDMA is only forecasting price-adjusted output growth of 2 percent in 2019 after 5 percent in 2018.
The VDMA's growing pessimism was also reflected in the findings of a recent survey among 100 industry firms conducted by the accountancy firm PricewaterhouseCoopers (PwC). Although seven out of 10 respondents were confident about the stability of German economic momentum, only a third thereof were upbeat for the prospects of the global economy as whole. Nevertheless, 70 percent of engineering firms polled indicated that they were still working at the limits of their productive capacity due to the currently favorable commercial environment.
Counting around 1.35 million workers in total, mechanical and plant engineering is Germany's single largest industrial employer.
