Major economic indicators are positive and prospects for continued growth are solid, according to the second-quarter 2016 report by the German Machine Tool Builders’ Association (VDW.) The trade association, which represents the largest machine-tool design and manufacturing industry in Europe, and one of the largest industrial sectors in the German economy, reported Q2 new orders rose 16% year-over-year, with strong increases from both domestic (+19%) and foreign (+14%) customers.
New orders from within the Euro Zone increased by 37% of the 2Q increase, and orders from non-Euro Zone nations increased 10%.
Overall, during the April-June period, new orders increased 12% compared to the Q2 2015 period, and while VDW members’ domestic new orders rose by 10%, orders from abroad were also up by 13%.
The trend seems to overtake VDW’s forecast from earlier this year, that 2016 economic growth would be slow and nominal for the machine tool sector.
“The year’s second quarter … signals a green light for an overall rise in orders during the current year. Our business is running significantly better than we expected at the beginning of the year. The sector can point to a sound, balanced performance over the year’s first half,” according to VDW executive director Dr. Wilfried Schäfer.
The higher level of demand results mainly from a strong domestic business conditions, but more particularly from the development of new automotive manufacturing projects in China and Mexico. This explains the simultaneous, substantial rise in orders in both domestic orders and exports.