Machinery and plant engineering does well on the export markets
Mechanical engineering companies have held up well with their exports in the year to date. Machinery exports recorded nominal growth of 4% in the first nine months. However, price effects were primarily responsible for this growth.
The export-oriented machinery and plant manufacturers from Germany have so far been able to hold their own in a very difficult environment in 2022. According to provisional figures from the Federal Statistical Office, machinery exports recorded nominal growth of 5.2% year-on-year in the third quarter alone. In the first nine months, machinery exports increased by a nominal 4.0% year-on-year to € 140.3 billion. “The machinery and plant construction sector continues to do well. However, price effects are primarily responsible for the growth,” says VDMA chief economist Dr Ralph Wiechers. Adjusted for prices, companies recorded a real decline of 2.9% in exports in the third quarter. From January to September inclusive, the real decline was 2.8%.
Decline in exports to China, USA still with momentum
Machinery exports to the two most important individual markets, the USA and China, have been showing a clearly divergent development for some time. In the first three quarters of 2022, machinery and equipment worth € 18.0 billion was delivered to the United States. This corresponded to a nominal increase of 19.4%. “Machinery and plants from Germany are in demand in the USA. And the weak euro strengthens price competitiveness in this growth market,” Wiechers explains.
To China, on the other hand, machinery exporters recorded a nominal decline of 2.8% to € 14.1 billion in the same period. “Industrial activity in China stabilised slightly in the third quarter after declining sharply in the second quarter due to the lockdowns in Shanghai and other provinces. German machinery exports to China also recovered somewhat as a result and, with a nominal increase of 4.9% in the third quarter, are well above the annual average,” analyses the VDMA Chief Economist.
However, the latest export figures should not hide the fact that the strict Covid measures in China are still a burden not only on machinery exporters but also on local companies, as a recent survey of VDMA member companies shows. “Against this background, the Chinese State Council’s decision to relax the strict Covid measures somewhat is only a small step in the right direction,” says Wiechers.
Only slight increase in nominal exports to the EU
Machinery and equipment worth € 61.4 billion were exported to the countries of the European Union from January to September. This means that machinery exports to the EU-27 are nominally 2.1% above their previous year’s level. The export business with the important customer country France almost stagnated (plus 0.4%), while Italy recorded a strong plus of 8.3% and the Netherlands was slightly above the EU average with plus 2.8%. Within the top 20 exporting countries, the United Kingdom (plus 10.4%), Switzerland (plus 11.5%), Turkey (plus 16.7%), India (plus 31.7%) and Mexico (plus 19.3%) achieved double-digit growth. In contrast, machinery exports to Russia fell sharply by 44.4% to € 2.3 billion. This reduced Russia’s share of total German machinery exports to only 1.6%.
