Economic Performance Of The German Machine Tool Industry in The First Half Of 2025

In the second quarter of 2025, orders received by the German machine tool industry remained at the same level as the same period the previous year. Domestic orders fell by 14% year-on-year, while foreign orders increased by 7%.

 

In the first six months of 2025, the German machine tool industry's overall order intake fell by 5%. Domestic orders fell by 22% year-on-year, while foreign orders increased by 4%.

 

Commenting on the results, the head of the German Machine Tool Builders' Association (VDW) stated that the main driver in the first half of this year came from European countries, although demand levels in the German domestic market have yet to recover. The ongoing uncertainty caused by US tariffs and other crises is leading investors to adopt a wait-and-see approach. While the recently negotiated 15% tariff rate between the US and Europe has taken effect, it will increase costs and severely curb German exports to the US, its largest market. American industry desperately needs German machines because there are no comparable domestic alternatives, but small and medium-sized businesses, in particular, cannot afford the higher prices.

 

In contrast, Germany's medium-term outlook is gradually brightening. Approved increases in defense and infrastructure spending, as well as recently approved investment plans, are expected to significantly boost consumer spending. However, the ifo business climate index suggests that confidence in the German manufacturing sector is recovering. International Purchasing Managers' Indices (PMIs) also indicate that the industrial downturn has bottomed out. However, this still falls short of the expected full recovery, according to a VDW head.

 

The recovery of the machine tool industry has suffered another setback, according to a VDW head. A return to stable growth is not expected until 2026. While domestic demand in Germany is expected to boost growth, overseas business performance may be weaker than previously expected. The US tariff policy is severely impacting its own economy, making it difficult to generate strong momentum in the short term.

 

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(Editor's Note: The diamond tool industry belongs to the abrasives and grinding tools industry, which in turn belongs to the machine tool industry. Data from the machine tool industry can also partially reflect the performance of the diamond tool industry.Personal opinion, for reference only)