German Tool Industry in Top Form, VDW Says

The German machine tool industry continues to enjoy a level of demand that is as lively as ever, according to the VDW, the German Machine Tool Builders’ Association. In the first six months of 2008, orders were 14% higher than in the same period last year. Incoming domestic orders rose by 9%, while foreign demand climbed 17%.

“Such an achievement means our industry has managed to improve even on the high level at which it was already operating,” explains Dr. Wilfried Schäfer, VDW executive director.

Especially good news is that employment has risen such that, for the first time since 1994, the overall workforce in the German machine tool industry exceeds 70,000. Top values were registered also for capacity utilization (at 96%) and orders in hand (good for the next 9.2 months).

Notwithstanding these developments, the VDW believes it would be a mistake to talk of sky-high hopes, even in the machine tool building sector. Domestic business is already showing signs of reaching a saturation point with respect to customers modernizing and expanding their production capacity.

Foreign orders continue to be the mainstay of the German machine tool industry. Driven by the buildup and expansion of the threshold-market industries in the BRIC states (Brazil, Russia, India, China) and Eastern Europe particularly, foreign demand continues to hold strong at record levels. In important industrialized nations, too, such as the USA, Switzerland, Spain, and the UK, orders again rallied at the beginning of the year.

The machine tool industry is one of the five largest trade branches within the German mechanical engineering sector. It supplies production technology for metalworking in all sectors of industry and contributes significantly to industrial productivity advancement. Because of its key role in industrial production, its development is an important indicator of the economic dynamism of industry as a whole. Last year, the German machine tool construction sector provides machines and services totalling €12.6 billion in value.

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