According to the VDMA engineering association, Germany’s engineering sector saw a 3.2% increase in production during the first two months of 2023, compared to the same period last year. This growth is attributed to the easing of supply chain bottlenecks. Despite this positive development, the VDMA maintained its earlier prediction of a 2% decline in production for the year.
VDMA head Karl Haeusgen noted that the industry may only begin to see the effects of the current economic environment on incoming orders and sales after some time. Meanwhile, the association reported that the order books of German engineering companies contracted by 17% in January and February due to a worldwide economic slowdown.
The engineering sector in Germany currently faces a shortage of skilled workers, which is considered the most significant challenge for the industry. As of the end of 2022, the industry employed around 1.018 million people. Haeusgen added that the tight labour market is hindering the industry’s ability to recruit additional staff.