Crisis in mechanical engineering - order situation remains poor - see adaptability, innovation, new paths and opportunities

🏭 As is well known, mechanical and plant engineering is the backbone of German industry. But the latest figures from 2023 paint a rather bleak picture. Companies in this industry experienced a significant decline in their orders in September. This applies not only to the individual month, but also to the entire third quarter and the balance sheet for the first nine months of the year.

🌍 Mechanical and plant engineering has experienced considerable fluctuations in recent years, characterized by geopolitical tensions, global trade wars and uncertainties on the world markets. Added to this was the global pandemic, which both disrupted supply chains and dampened demand. The current figures reflect this uncertainty and the resulting economic impact.

📉 Despite several large orders in September, incoming orders were 13 percent below the previous year. This shows that even large contracts are not enough to compensate for the general downward trend in this industry. Interestingly, it wasn't just domestic orders that fell by 15 percent, but foreign demand also saw a 13 percent decline.

🌐 What is particularly notable is the difference in orders between non-euro countries and euro partner countries. While orders from non-euro countries only fell by 7 percent thanks to a few large orders, the euro partner countries recorded a drastic decline of 27 percent. This could be due to a number of factors, including economic uncertainties in the Eurozone, possible trade tensions or other geopolitical events.

👨‍🔬 Dr. Ralph Wiechers, the VDMA's chief economist, emphasized the ongoing challenges for mechanical and plant engineering. He pointed out that despite the obvious need for investment in the sector, the lack of positive momentum is noticeable. The ongoing negative headlines and global uncertainties undoubtedly impact customers' willingness to invest, not only in Germany but worldwide.

“The consequences of high inflation and uncertainty caused by wars and other geopolitical upheavals can be seen more or less clearly in all markets.”
Dr. Ralph Wiechers, VDMA chief economist

📈 It remains to be seen how mechanical and plant engineering will develop in the coming months. There is hope that global markets will stabilize and demand will pick up again. However, companies in the industry will continue to face challenges, whether due to technological changes, competition from abroad or other macroeconomic factors.

🚀 To thrive during this difficult time, mechanical and plant engineering companies may need to rethink their strategies, encourage innovation and adapt to ever-changing market conditions. Only through adaptability, innovation and the ability to see opportunities in the midst of challenges can they thrive in such a volatile environment.

🇩🇪 Mechanical and plant engineering in Germany is facing significant challenges. The current numbers are a wake-up call for the industry to adapt and look for new ways to thrive in an ever-changing global market environment. It is hoped that both companies and policymakers will take the necessary steps to get the industry back on track and consolidate its position as one of the leading players in the global industry.

📣 Similar topics

• Mechanical and plant engineering in Germany 2023: challenges and opportunities 🏭
• Downward trend in mechanical engineering: What's behind it? 📉
• Global uncertainties and their impact on the mechanical engineering industry 🌍
• Investments in mechanical and plant engineering: Why are there no positive impulses? 💰
• Decline in orders in mechanical engineering: A look at the Euro partner countries 🇪🇺
• Future of mechanical and plant engineering: adaptability and innovations 🚀
• Dr. Ralph Wiechers about the current challenges in mechanical engineering 💼
• The role of the pandemic in incoming orders in mechanical engineering 🦠
• Strategies for success in mechanical and plant engineering in 2023 🔍
• The hope for a recovery in mechanical engineering: outlook for the future 🌟

#️⃣ Hashtags: #mechanical engineering #plant engineering #economy #challenges #innovations

In the first three quarters of 2023, companies were faced with a significant challenge: new orders recorded a real decline of 14 percent compared to the same period last year. This downward trend was reflected in both domestic orders, down 12 percent, and foreign orders, down 16 percent. The euro countries were particularly affected, recording an above-average decline of 18 percent, while the non-euro countries were slightly less affected at 14 percent. According to Dr. Wiechers, the consequences of high inflation and the uncertainty caused by military conflicts and further geopolitical unrest are manifesting themselves in almost all markets.

Decline in new orders in the third quarter of 2023

If you look at the period from July to September 2023, a similar picture emerges: a real decline in incoming orders of 15 percent compared to the previous year. Domestic orders fell by 12 percent, while foreign orders were even lower by 16 percent. What is striking here is the particularly strong decline in orders from euro countries of 23 percent, in contrast to non-euro countries, which recorded a decline of 13 percent.

🌍 Causes of the economic slowdown

The economic slowdown during this period is due to a variety of factors. Inflation in many countries reached peaks last seen in the 1970s. The cost of energy and raw materials rose relentlessly, weighing not only on consumers but also on companies faced with rising production costs. The war in Ukraine and the resulting sanctions against Russia had far-reaching consequences for the global supply chain, leading to shortages and increased costs. In addition, the ongoing uncertainty regarding the COVID-19 pandemic contributed to the uncertainty.

📈 Impact of interest rate increases on the economy

Another aspect that influenced the economic situation was the global increase in interest rates by central banks in response to inflation. However, this measure, aimed at cooling the economy and curbing inflation, has also curbed investment and consumption. Companies that were already struggling with rising costs and an uncertain outlook were now also faced with more expensive loans and a more reluctant customer base.

🏭 Impact on the industrial sector

The industrial sector, especially mechanical and plant engineering, is particularly feeling these developments. As the backbone of many economies, they are directly dependent on the willingness to invest in other sectors. In this context, the decline in orders could be interpreted as an early indicator of a general economic slowdown. The manufacturing industry is traditionally strongly export-oriented, especially in countries like Germany. The declining figures from abroad indicate that the global economy is also facing challenges.

🔄 Adjustment of company strategies

In order to respond to the changing conditions, companies are forced to adapt their strategies. The focus is on cost reductions, increases in efficiency and the diversification of sales markets. Some companies rely on innovation and new product development to respond to changing consumer needs and market conditions. Digitalization and automation are seen as the key to increasing competitiveness. Furthermore, the crisis could also offer opportunities, for example by accelerating structural change towards more sustainable and resilient economic models.

🌐 Global uncertainty remains

However, all these efforts are embedded in an environment of global uncertainty. The economic prospects for the last quarter of 2023 and beyond therefore remain difficult to predict.

📣 Similar topics

• Economic challenges in Q3 2023 🌍
• Inflation and its effects 💰
• Impact of the Ukraine conflict on the supply chain 🇺🇦
• Central banks and interest rate hikes 🏦
• Mechanical and plant engineering in crisis 🏭
• Adaptation strategies for companies 🔄
• Innovations and new products in uncertain times 🚀
• Digitalization and automation in the economy 🤖
• Sustainable economic models as a future perspective 🌱
• Global uncertainty and the economic forecast 🌐

#️⃣ Hashtags: #economy #inflation #supply chain #central banks #industry #adaptation #innovation #digitalization #sustainability #uncertainty

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