German machine tool industry with moderate annual results 2024

Turnaround expected in second half of 2025

The German machine tool industry received 7 percent fewer orders in the fourth quarter of 2024 than a year earlier. Orders from both Germany and abroad fell by similar amounts: 7 percent and 6 percent, respectively. In 2024 as a whole, incoming orders fell 19 percent. Domestic orders fell 9 percent from the previous year, while orders from abroad fell 24 percent.

"The situation remains challenging for our industry," says Dr. Markus Heering, executive director of the VDW (German Machine Tool Association) in Frankfurt am Main, about the result. The U.S. market offers great opportunities for German manufacturing technology, which is considered indispensable, but Trump's tariff policy carries great risks, Heering continued. The ongoing turbulence in the global economy, including the threat of a trade war, affects the general willingness to invest. In particular, the critical situation in the auto and supply industry is a burden.

Nevertheless, Heering reports that there are also some glimmers of hope on the horizon - for example, in aerospace, medical technology, precision engineering, energy, shipbuilding and armaments, which have accounted for a number of large orders in the past.Service, parts, repairs, maintenance and conversions business is also stronger than new machine sales.However, order volumes fell by a quarter last year in all regions of the world.

No increase in momentum is expected until the second half of the year, when lower inflation and interest rates are expected to support a recovery in investment.
"We expect clear support from the new German government to meet all the demands the industry has been making for months: less bureaucracy, lower costs, more competitiveness and more investment activity, just to name the most important demands," said VDW Director Heering.

The effects of the two-year decline in the number of orders received are now also being felt in machine tool production.Here the level continued to decline by a moderate 4 percent in 2024.A sharp 10 percent decline is expected in 2025.