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| VDMA |
VDMA survey shows rising optimism, but challenges in exports and bureaucracy remain
Germany’s mechanical and plant engineering sector is seeing early signs of recovery in 2025, according to a late March survey by VDMA, but the industry’s mood remains cautious amid global headwinds and policy uncertainty.
Sentiment Improves, But Confidence Is Fragile
Out of 940 firms surveyed, 27% rated the current business climate as good or very good, up from 22% in January. Meanwhile, 30% still view the situation as poor or very poor. Expectations for the next six months have improved, with nearly one-third of companies anticipating better conditions, compared to just 22% in January.
However, VDMA chief economist Ralph Wiechers warned the positive trend might be short-lived, especially as the data was collected prior to the U.S. tariff announcements on April 3, which could impact global trade dynamics.
Infrastructure Funding and Lower Rates Offer Support
Lower interest rates are expected to stimulate industrial activity, and Germany’s €500 billion infrastructure fund could drive long-term growth in the sector. Yet, many firms remain concerned about bureaucratic delays and approval bottlenecks that may hinder the investment rollout.
Domestic Market Gains Ground as North America Wanes
While North America has traditionally been the largest overseas market, optimism about its future has dropped. Only 29% of firms expect improved sales in North America, down from 42% in January.
In contrast, sentiment about Germany’s domestic market has strengthened. Nearly one-third of companies foresee a positive trend at home, up sharply from 13% in January.
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