Germany’s mechanical and plant engineering industry closed 2025 with zero growth in order intake. Overall, sentiment in the sector has recently improved somewhat.
The industry ended the year with order books at the same level as the previous year, resulting in overall real order growth of zero. This performance was driven by a 7 percent increase in orders from Euro area partner countries. By contrast, orders from the domestic market (down 1 percent) and from non-Euro countries (down 2 percent) declined over the year.
In the month of reporting in December, real order intake fell by 5 percent year-on-year. The main factor was an 11 percent decline from non-Euro countries, partly due to large-scale orders recorded in the same month of the previous year. Orders from euro area countries decreased by 3 percent, bringing total foreign orders down to 9 percent overall. Domestic orders, however, rose by 7 percent compared with the previous year.
“Signs of a cyclical bottoming-out in Germany’s mechanical and plant engineering sector are becoming more evident. This is reflected in the annual order stagnation as well as in the growing order intake in the fourth quarter in particular. For 2026, we therefore continue to forecast a modest real increase in production of 1 percent. At the same time, policymakers must implement structural reforms to improve the competitiveness of Germany as a business location in order to enable sustainable and stronger growth,” says Johannes Gernandt, Chief Economist of the VDMA.
The fourth quarter of 2025 (October to December) recorded real order growth of 3 percent. Domestic orders remained unchanged year-on-year. Orders from abroad increased by 4 percent overall (euro area: minus 2 percent; non-euro countries: plus 6 percent).
Overall sentiment in the mechanical and plant engineering sector has recently improved slightly. According to the VDMA’s business survey conducted in January, nearly 30 percent of the 962 participating companies rate their current situation as “very good” or “good,” compared with 23 percent in the previous survey in October. Fewer than a quarter (24 percent) assess the situation as “poor” or “very poor” (October: 33 percent).
Slight Upturn Becoming Noticeable
The outlook has also improved noticeably: almost one in three companies (30 percent) is optimistic about the next six months (October: 21 percent), while only 9 percent expect conditions to deteriorate.
For the current year, around 57 percent of companies anticipate nominal sales growth, just under 29 percent expect stagnation, and fewer than 15 percent foresee a decline in sales.
“More companies assess their current business situation positively than negatively. This was the last time in spring 2024. It is an encouraging sign – but no more than that. Uncertainty remains high, and sentiment is still tense in view of the fragile developments in key customer industries and sales regions,” Dr. Gernandt concludes.
