In Germany, Outlook Hovers Between Elation and Trembling

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In Germany, Outlook Hovers Between Elation and Trembling

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Lately, automation providers in Germany live in two worlds.
In one, the companies are still very well. Many producers recorded record sales that exceed even the record year 2008. The other world is the one that employers and employees experience from their sofas in front of their TVs. In that world, everybody is speaking of banking crises, national bankruptcy, Euro bailout funds and unmanageable risks.

The business of automation providers in Germany has been very good for many months now. The crisis from 2008 and 2009 was resolved amazingly fast. A few have recorded an all-time-high this year. There are two very good association sources of automation supplier data from the mechanical and plant engineering sectors that give a clear picture of their economic state.  Both Verein Deutscher Maschinen- und Anlagenbauer (VDMA, covering mechanical and plant engineering) and Zentralverband Elektrotechnik- und Elektroindustrie (ZVEI, covering electrical engineering) always give very resilient and good data. So it’s quite interesting to take a look at their latest
results.

According to ZVEI, the economic climate of the electrical industry has declined for the fifth month in a row now. The evaluation of the current situation, as well as the expectations for the upcoming half-year, has been lower than in August. Concerning the estimation of the current economic situation, the balance of positive and negative responses decreased from 40 to 36 percent, but is still clearly above zero.

In September expectations for the next six months have been slightly negative for the first time since July 2009. In April, ZVEI forecasted an increase of 10 percent for electronics production, and another achievement of 180 billion Euros in sales. According to the association, the German electrical industry is in a robust economic condition. From January until July 2011, the order increase in Germany’s second-biggest industry branch—companies with more than 830,000 employees—amounts to a cumulative 14 percent increase compared to the previous year.

According to VDMA, incoming orders in mechanical and plant engineering were 1 percent more in September compared to last year.  Domestic business lost 2 percent, and foreign business rose 3 percent compared to the previous year’s level. In the less by short-term-fluctuations influenced three-month-comparison from July until September 2011, altogether a plus of 8 percent growth was recorded. That included a 13 percent rise for home orders, and a 5 percent increase in foreign orders.

Watching this, we already get an idea of the area of tension the German mechanical engineers and automation providers are in. Both groups are very healthy and robust, but they can’t unhitch from the global economic condition completely. The next weeks and months are going to be very exciting. 

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