According to preliminary results from the German Federal Statistical Office, machinery exports rose by 8 percent year-on-year in nominal terms in the second quarter. In the first quarter of 2023, the increase was still 15.3 percent.

In the entire first half of the current year, machinery exports recorded a nominal increase of 11.5 percent to 104 billion euros. Adjusted for prices, however, machinery exports increased by only 3 percent in the first half of the year.

Ifo Institute: Export expectations as low as in mid-2020

VDMA chief economist Dr. Ralph Wiechers explains: "The renewed growth in exports is partly due to inflation and partly to the fact that supply chains have eased considerably in many areas. As a result, machinery and plant manufacturers are able to further reduce their order backlogs, some of which are high," and he adds, "However, in view of double-digit declines in orders, we must prepare ourselves for further declines in export volumes. According to the Ifo economic survey, the export expectations of mechanical engineering companies for the next three months are currently at their lowest level since mid-2020."

U.S. business makes strong gains

Machinery deliveries to the USA, the largest export market, were a positive factor. Between January and June, they continued to grow strongly by a nominal 21.6 percent year-on-year. The value of exports in the first half of the year thus came to around 13.8 billion euros.

"There are two main reasons for the strong demand from the USA: First, the U.S. economy is proving resilient in the face of rapid monetary tightening, with robust consumer demand and a strong labor market," says Dr. Wiechers. "Second, meeting the goals of the Inflation Reduction Act and the CHIPS Act will also require machinery and equipment from Europe."

Exports to China grow only slightly

Business in China, on the other hand, is not really taking off after the Corona measures are discontinued at the end of 2022. German machinery exports to China grew by only 4.4 percent in nominal terms to 9.5 billion euros in the first six months.

"Many companies started the new year optimistic about business in China. However, a clear economic upturn has not yet materialised. As a result, industrial production in China hardly changed for the better in the second quarter compared with the previous quarter," adds Wiechers.

EU exports show double-digit growth

German machinery exports to the partner countries of the European Union grew by a nominal 10.5 percent. Machinery exports in the first six months of the year were worth 46.3 billion euros.

Among the most important buyers of German machinery and equipment, France in particular recorded high growth, 18.7 percent in nominal terms. Agricultural machinery in particular contributed to this strong growth. German machinery exports to Italy rose by 8.9 percent in nominal terms, to the Netherlands by 8.5 percent in nominal terms and to Poland by 13 percent in nominal terms.

51.4 percent less machinery and equipment was shipped from Germany to Russia in the first half of the year, following a sharp drop in business in the previous year. Russia's share of total German machinery exports is therefore now only 0.8 percent, and the trend is continuing to fall.