Europe is and remains a guarantee of success for mechanical engineering

Siemens

Europe continues to be the most important turnover region for mechanical engineering companies in Germany – and is thus also the guarantee of continued high employment in this industry.

Exports increase by 0.2 percent to 156 billion euros in 2016
Exports to Euro countries increase noticeably
by 5.3 percent
Russia slips to 11th place in the export ranking,
the USA remains in front

Germany exported machinery worth a total of 155.9 billion euros last year – a small increase of 0.2 percent compared to the previous year (155.5 billion euros). “Europe proved to be the most important support pillar,” stressed VDMA Chief Economist Dr. Ralph Wiechers. Exports to EU countries grew by 4.1 percent in 2016, while machinery exports to the eurozone even increased by 5.3 percent. “At 46.5 percent, the EU accounted for almost half of the machinery delivered. Shortly after the financial crisis in 2012, this share had fallen below 40 percent at some point,” explained Wiechers.

The success on the domestic market was important due to the fact that sales on the large overseas markets were less effective for mechanical engineering companies. In the USA, the largest single market for suppliers of capital goods, machinery and plants worth 16.3 billion euros were sold – 2.9 percent less than in the previous year, which saw a strong increase of 11.2 percent. The USA, however, remained the most important single sales market for mechanical engineering companies from Germany, ahead of China. Machinery worth 14.6 billion euros was exported to China. This represents a decrease of 9.3 percent, after the previous year had also ended on minus 5.9 percent.

Europe continues to have strong standing on the credit side.

2016 also saw severe setbacks in countries that are particularly dependent on the prices of raw materials. Exports to Brazil fell by a quarter (25.6 percent), while exports to Saudi Arabia fell by almost a third (32.1 percent). In 2015, negative rates like these were also recorded for the Russian market. This trend continued into 2016, with exports to Russia falling by another 6.6 percent. At a share of 2.8 percent, Russia is only at 11th place in the ranking of the most important export destinations of German mechanical engineering, behind the Czech Republic.

Only a few foreign markets saw positive growth similar to that on the European market. Exports to South East Asia grew by 3.9 percent, while Japan – normally a competitor – bought 11 percent more German mechanical engineering products. Business in Iran, which had been rather slow in the past years, also recorded a considerable increase of 37 percent. Exports to Egypt saw a steep rise by 80 percent, although this was perhaps mainly driven by a few, very large projects.

“In the current year, the effects of some negative factors such as the development of raw materials prices will diminish,” said VDMA Chief Economist Wiechers, displaying cautious optimism about the current developments. “Europe continues to have strong standing on the credit side. We simply have to wait and see what the consequences of the announcements of the new Trump administration will be, provided that they are implemented.”

Do you have any questions? Hermann Steib, VDMA foreign trade expert, phone:
+49 69 6603 1372, hermann.steib@vdma.org, would be delighted to answer them.

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