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Machinery exports up slightly in value terms in first half of year

Release Date: 15 Aug 2022
Machinery exports up slightly in value terms in first half of year

Exports in the machinery and plant engineering sector rose by a nominal 2.3 percent year-on-year in the first half of the year. Against the background of the geopolitical and global economic situation, the machinery and plant engineering sector got off fairly lightly.

Despite the challenging market environment, exports of machinery from Germany increased slightly by 2.3 percent year-on-year in nominal terms in the second quarter, according to provisional figures from the German Federal Statistical Office. This is in line with growth in the first quarter. Consequently, machinery exports for the first half of the year also rose by 2.3 percent to 91 billion euros. The increase was due entirely to price effects. When viewed in volume terms, i.e., in real terms, machinery exports were 3.7 percent below their prior-year level. "In view of the war in Ukraine, the ongoing pandemic, disruptions in the supply chains and high material costs, the machinery sector has thus got off lightly," says VDMA Chief Economist Dr. Ralph Wiechers, commenting on the figures. 

Exports to China down, USA still show strong growth

Machinery exports to the two most important single markets, the USA and China, have been showing a clearly divergent trend for some time. In the first six months, machinery and equipment worth 11.4 billion euros were shipped to the USA. This is an expansion of 16.2 percent. By contrast, machinery exporters to China recorded a decline of 6.5 percent to 9.1 billion euros. "The weakness in growth in China goes beyond the direct consequences of the "zero covid" policy. This is also becoming apparent in the surprising interest rate cut by the Chinese central bank, which is intended to provide new stimulus for the economy. In addition, foreign companies are increasingly encountering political obstacles in the Chinese market," says Wiechers. "Economic growth is also cooling significantly in the United States. Unlike in China, the U.S. Federal Reserve raised the key interest rate for the fourth time to combat high inflation. There is legitimate hope that new capex is likely to come from the recently passed U.S. climate bill. European machinery manufacturers will benefit from this, explains Wiechers.

Economic growth is also cooling significantly in the United States.
Dr. Ralph Wiechers, VDMA Chief Economist

Stagnation in machinery exports to the EU

Machinery worth 39.9 billion euros was exported to the countries of the European Union in the first six months. With a nominal increase of 0.3 percent, machinery exports to the EU-27 were thus at least on a par with the previous year. The export business with the three most important customers from the EU-27 - France (minus 4.5 percent), Italy (plus 11.0 percent) and the Netherlands (plus 2.8 percent) - was heterogeneous.

Machinery exports to Turkey grew at a double-digit rate of 12.1 percent. Turkish exporters are investing thanks to the exchange rate-related improvement in their price competitiveness. In the same period, 12.4 percent more machinery and equipment were shipped to the United Kingdom. Machinery exports to Russia slumped by 36.7 percent to 1.8 billion euros in the first half of the year. This reduced Russia's share of total German machinery exports from 3.2 percent to just 2.0 percent. In the same period, 40.8 percent less machinery was shipped to Ukraine and 55.9 percent less to Belarus.

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