German Machine Tool Orders Remain Strong

The rise in demand for German machine tools continues, according to the latest data gathered and analyzed by the VDW, the German Machine Tool Builders’ Association. In the third quarter of 2007, 31% more orders were placed than in the same period last year. This dynamic business trend was supported primarily by domestic customers: third-quarter German orders rose by 42%, while foreign orders increased by 23%.

Over the first nine months of 2007, demand likewise rose by 31% in comparison with the previous year’s first three quarters. In this case, the gap between domestic and foreign users of German-made machine tools is less dramatic; domestic users ordered 35% more machine tools and foreign orders climbed by 29%.

“The manufacturers of machine tools are largely working at their capacity limit,” says Gerhard Hein, director of economics and statistics for the VDW. Bottlenecks in the supply of components and parts are adding significantly to throughput times for machine tools. Waiting periods as long as six months are being cited for bearings, racks, apparatus, and castings. This means that the German machine tool sector will carry a considerable backlog of orders over into the new business year.

Hein further points out that the positive order situation is having an impact on employment. In August of this year, the sector had an aggregate workforce around 1,900 employees larger than it was in August 2006, an increase of around 3%.

The German machine tool industry is one of the five largest national sectors specializing in machine construction. It supplies production technology for metalworking needs in all branches of industry. Its key role in industrial production makes trends and developments within the sector important indicators of the dynamic condition of German industry as a whole, according to the VDW.

Last year, the German machine tool sector, with its aggregate workforce of approximately 65,000 people employed in enterprises with staffs of 20 or more, supplied machines and services having a total value of €10.8 billion.

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