In the first seven months of the current year, mechanical and plant engineering recorded a real increase in production of 7.1 percent compared to the previous year. While the order books in mechanical and plant engineering have filled well in recent months despite the corona pandemic, many companies are struggling with increasing material and delivery bottlenecks. "According to our latest VDMA quick survey from the beginning of September, 81 percent of mechanical engineering companies now have noticeable or serious impairments in their supply chains. In particular, shortages of electrotechnical and electronic components have increased dramatically. In addition, almost two thirds of those surveyed suffer from impairments in logistics and transport processing . That is significantly more than even at the peak of the pandemic in mid-April 2020 ", says VDMA chief economist Dr. Ralph Wiechers.

An easing of the tension, especially with regard to the supply of preliminary products, is not to be expected, at least for the next three months. "40 percent of the surveyed mechanical engineering companies even expect increasing problems, 52 percent with constant challenges," explains Wiechers. Therefore, despite the good order situation, caution is still advisable with a view to the coming year. "The momentum in some countries is already slowing down significantly, and the delta variant and insufficient vaccination progress are burdening economic activity in many countries. We are therefore assuming somewhat weaker production growth of 5 percent in real terms for 2022. Overall, however, the upswing should remain intact In addition, everything that can no longer be manufactured this year for reasons of scarcity will be implemented next year, "predicts the VDMA chief economist.

High order growth in the current year

In the first seven months of the current year, mechanical and plant engineering recorded a real increase in production of 7.1 percent compared to the previous year. Incoming orders rose even more sharply from January through July, increasing by 30 percent compared to the previous year (domestic: plus 20 percent, abroad: plus 36 percent). According to the VDMA economists, this will ensure continued high capacity utilization and production growth in the coming months. For the full year 2021, the VDMA economists stick to their estimate of 10 percent growth. This would bring the industry a good deal closer to its production value of 2019. Hopes for even higher growth in the meantime will, in all probability, not be fulfilled. In some branches, especially among the manufacturers of parts and components, as well as in Asia, there are first signs of a slower pace of expansion. “Others are only just getting going, but have to cut back on their production plans because of the numerous bottlenecks,” says Wiechers.

Sales expectations clearly positive

This assessment is confirmed in the latest VDMA quick survey, in which almost 600 companies took part. According to this, nine out of ten companies are currently able to implement less as a result of production disruptions than would be possible under other conditions. This also dampens sales expectations for the current year: Almost half of the machine-builders (44 percent) put the reduction in sales growth in 2021 as a result of material bottlenecks to 1 to 5 percentage points, a further 28 percent even make a discount of 5 to 10 percentage points. “After all, around 90 percent of the companies are expecting an increase in sales for the current year. But the majority of the companies will draw conclusions from the difficult supply situation, ”emphasizes Wiechers. According to the VDMA survey, more than 70 percent of the companies are now planning to make changes in the supply chains. Above all, this means expanding the supplier network - also geographically -, increasing warehousing and looking for alternative delivery routes.

A shortage of skilled workers hinders growth

Activities are not only slowed down on the supplier side, but also by noticeable bottlenecks on the labor market. "More reports of a shortage of skilled workers are noticeable, 61 percent of the companies surveyed feel this noticeably or even seriously. A good two thirds also see no relaxation and almost 30 percent even see the situation worsening over the next three months," summarizes the VDMA chief economist.

The high demand for short-time work during the crisis has undoubtedly saved the mechanical engineering industry from even greater problems. But looking ahead, companies, society and politics must make great efforts in order to maintain the competitiveness of industrial SMEs in the long term, or better still: to increase them. "The next federal government must finally give companies more freedom again in order not only to master the far-reaching transformation of the economy with market-based means, but also to generate new growth from it. This does not come about through tax-financed state action, but through entrepreneurial courage, personal and financial commitment and the ability to accept setbacks from time to time. Against this background, all plans to reintroduce a wealth tax are poison for the efforts of thousands upon thousands of medium-sized companies who have to cope with large investments on their own. "