Mechanical engineering heading towards record turnover

Despite Brexit, trade war & co.

Mechanical engineering is and will remain one of the most successful sectors in Germany – also in 2018. At the annual press conference, the head of the VDMA association, Carl Martin Welcker, expressed his optimism: “The production growth of 5 percent to the record figure of 228 billion euros that we forecast for 2018 is ambitious but feasible.

Mechanical engineering remains largest employer

The past year will be the second growth year in a row. By the end of October 2018, production had already increased by almost four percent. Incoming orders were about seven percent higher than in 2017.

Companies can only meet the high demand with more personnel: The number of employees in companies with over 50 employees in Germany rose by 34,000 to over one million (by September). This corresponds to an increase of more than three percent. With a total of 1.3 million employees, mechanical engineering remains the largest industrial employer in Germany.

But not everything runs smoothly in Germany’s flagship industry:: companies complain above all about bottlenecks in the supply chains and a lack of specialists. This affects almost 30 percent of each company.

Brexit and trade conflict could affect 2019

It is unclear whether the momentum will continue in 2019. The economists of the VDMA only expect production growth of two percent in real terms. The reason for this is the slower growth of the global economy. Since mechanical engineering is particularly dependent on exports (export ratio: 80 %), the sector could feel the effects.

The development of economically relevant issues, such as Brexit and the trade conflict, is also uncertain. “Considering the unclear situation, our companies have to prepare themselves for a hard Brexit. The chances of avoiding this scenario are getting smaller every day” warned Welcker.