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11. September 2012

German engineering output to rise 2% this year and in 2013

A strong first quarter leads to improved growth expectations.

The German engineering federation VDMA has raised this year’s estimate for machinery and industrial plant production from nothing to a price-adjusted figure of 2% and said output will increase "around" 2% in 2013. The federation announced in February that it expected no growth this year.

Output was up 4% in the first half versus the year-earlier period after surging 8.1% in the first quarter, the federation noted. Production rose a meagre 0.2% in the second quarter.

According to VDMA Chief Economist Ralph Wiechers, the strong initial three months of 2012 sparked the upward revision. “We started out a lot better than expected in the spring. That is pulling up the result for the entire year.”

Trouble ahead for Europe's tool and mould industries?

While Europe’s largest industrial federation expressed guarded optimism about next year, it warned that outside factors could derail German manufacturing. Wiechers said preconditions for making the predicted numbers are de-escalations of both the Eurozone crisis and the sovereign debt problems of a number of European nations. In addition, he tethered growth to economic improvement in a number of international markets, singling out China.

VDMA Managing Director Hannes Hesse said, “We know all too well that these predictions cannot withstand an exacerbation of problems in the Eurozone and display a certain contradiction compared to the current mood.”

Hesse noted that not all sectors within the machinery and plant business can expect production growth. “However, that does not preclude a plus for the machinery industry as a whole.”

Sourced from etmm-online.com

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