Germany's Machinery Industry: A Turning Point Ahead?

Germany's machinery industry faces a fourth year of decline in 2026, with production expected to fall by 2%, says the VDMA. Positive forecasts for 2027 show real production growth of 3%, driven by improved orders, but weak domestic demand continues to challenge the sector.

Germany's machinery and equipment sector continues to struggle, experiencing a likely fourth consecutive year of decline in 2026. The VDMA announced a revised forecast, cutting previous estimates with production anticipated to drop by 2% in real terms.

The downturn in expectations comes despite signs of increasing demand and a dramatic 4.1% production decline within the first seven months of this year. However, industry experts project a much-needed turnaround by 2027.

VDMA chief economist Johannes Gernandt pointed to improved order conditions and more optimistic business forecasts expecting a 3% increase in real production. Nevertheless, sluggish domestic demand constrains immediate prospects for recovery across the broader machinery sector.