"An unusually low prior-year base, but also a powerful global industrial economy, are helping us to achieve high growth rates. In addition, the machinery and plant engineering sector is benefiting from extensive economic stimulus and growth packages in key sales markets," said VDMA President Karl Haeusgen.

For this reason, the VDMA is increasing its real production forecast for 2021 from the previous plus 7 percent in real terms to plus 10 percent. However, the strength and breadth of the upturn would result in a variety of production obstacles, Haeusgen explained. "Supply bottlenecks in particular are not only making us a lot of work, but are also slowing down our growth. In addition, there is still sand in the gears in many places due to the pandemic, which affects us in the form of travel restrictions, for example," he emphasized.

Climate protection needs a "climate club"

The VDMA president reiterated that the Paris climate targets can only be achieved with new technologies from the mechanical and plant engineering sector, and that companies see this as an opportunity for future business. He was therefore more concerned about the political implementation of climate protection. Since the EU has set itself very ambitious climate targets, companies on the international market are encountering competitors from other countries with much less ambitious targets, Haeusgen explained. Climate protection is an opportunity for many sectors - but in the basic materials industry in particular, high investments and costly processes result in cost disadvantages in competition. The "climate tariff" (carbon border adjustment tax) currently under discussion in the EU, he said, in turn poses the risk that other countries will take countermeasures. "Then we will enter a spiral of protectionism," warned the VDMA president.

It is therefore imperative, he said, that the EU does not introduce such a border adjustment mechanism on its own, but in cooperation with similarly minded countries such as the USA, Great Britain or Japan and South Korea. "This "climate club" needs similar framework conditions in order to be able to dispense with the mutual application of compensation measures," Haeusgen said. The rules of this "climate club" would have to be in line with those of the World Trade Organization (WTO). It would also have to be open to other countries joining. "We have only a very limited window of opportunity to initiate such a process, so policymakers should take the appropriate steps quickly," the VDMA president urged. "In particular, the newly awakened commitment of the U.S. to climate protection can be used to also bring transatlantic trade relations back to a better level," he summed up.