Increase in Orders for VDMA During June and throughout the Quarter
German manufacturing orders have shown a mixed pattern in the first half of 2025, with some sectors experiencing significant declines while others remain relatively stable. According to the VDMA, a trade association for the German machinery and plant manufacturing industry, orders within Germany decreased by 1 percent compared to the same period last year.
Declining Domestic Demand and Stable Foreign Orders
The current trends in machinery orders for German manufacturers reveal a downward pattern. In the first quarter of 2025, orders for German machine tools fell by 10% year-on-year, with domestic orders dropping by a staggering 30%. However, foreign orders remained stable, and U.S. orders showed growth, albeit at a slower pace [1].
Sector-Specific Weaknesses
The transport, automotive, and metal sectors have been particularly hard-hit, with orders for transport equipment dropping over 23%, automobiles by 7.6%, and metal products by 12.9% [3][4]. These declines signal vulnerabilities in export-driven sectors of the Eurozone, with Germany and Italy facing export-related contractions compared to more resilient economies like Spain and France [4].
The Impact of Trade Disputes
The ongoing trade dispute with the U.S. has contributed to uncertainty in global trade policy, impacting demand. However, U.S. orders to German manufacturers increased 19% in 2024 and continued growing in 2025, although at a slower pace than before [1]. This suggests that while trade tensions create some uncertainty, they have not yet severely curtailed orders from the U.S. market, possibly because of strong bilateral trade ties in machinery.
A Complex Dynamic
June 2025 saw a 1.0% month-on-month decline in new manufacturing orders in Germany. Orders from the Eurozone increased by 5.2%, contrasting with a 7.8% decline in orders from outside the Eurozone [2][4]. The entire second quarter of 2023 saw a 2% decrease in new orders (adjusted for prices) [5].
Potential Resolution to the Trade Dispute
The VDMA expert attributes the declines to the ongoing trade dispute but notes that there is expensively bought planning security for companies if the 'deal' holds [2]. The impact of the proposed 15 percent tariff on imports into the U.S. cannot yet be assessed.
Looking Forward
Despite the challenges, there are signs of hope. German government stimulus and infrastructure investments may help stabilize machinery demand going forward [1]. VDMA chief economist, Johannes Gernandt, attributes the growth in the first half of the year to a strengthening of Europe's location [5].
In summary, these trends illustrate ongoing challenges in German manufacturing driven by sector-specific weaknesses and complex international trade dynamics, particularly affecting export-dependent industries. However, the resilience of some sectors and the potential for a resolution to trade disputes offer a glimmer of hope for the future of German manufacturing.
[1] VDMA (2025). Quarterly Report on Machine Tools [2] VDMA (2025). Press Release: VDMA on the June Orders [3] Statista (2025). German Manufacturing Orders by Sector [4] Eurostat (2025). Eurozone Industrial Production [5] VDMA (2023). Press Release: VDMA on the Second Quarter Orders
In the given context, here are two sentences that contain the given words:
- The German machinery and plant manufacturing industry, which falls under the broader category of manufacturing, has experienced a decline in orders due to sector-specific weaknesses such as those in the transport, automotive, and metal sectors.
- The trade association for the German machinery and plant manufacturing industry, VDMA, mentioned in the text, has also been active in advocating for employment policies that could help support their industry during these challenging times.
