Frankfurt am Main – October 31, 2026 -- German machine tool orders rose 15 percent in the first quarter of 2026, the first notable upturn after three difficult years, while production fell 11 percent to EUR 2.8 billion, according to the VDW (German Machine Tool Builders' Association).
VDW chief economist Bernhard Geis said the trough has probably been passed but a clear trend reversal is still some way off. The coming months will show whether the recovery holds. Higher uncertainty and costs linked to the Middle East conflict are weighing on investment appetite.
Domestic and foreign orders rise 18 and 14 percent from a weak base
Domestic orders grew 18 percent and foreign orders 14 percent. The VDW cautions that the figures are only partly reliable: the starting level is low, especially in Germany, and one-off orders and project business play a major role. Service and retrofit business continue to stabilize the sector.
Demand varies sharply by customer industry. Aerospace, defense, medical technology and electronics are developing positively. Metalworking, general machinery and above all the automotive and supplier industries remain weak.
Domestic sales drop 13 percent, exports fall 10 percent
Domestic sales declined more steeply than exports. The US is the growth driver, with exports up 8 percent, while Europe fell 11 percent. Exports to Asia dropped 18 percent, driven by a 32 percent collapse in shipments to China. India has become the third-largest sales market.
Amid intense price competition, the "Local for Local" principle is gaining importance for German manufacturers with their own production on site.
Imports fall 8 percent as Japanese suppliers gain share in Germany
Imports declined 8 percent in the first three months, outperforming domestic sales. Japanese manufacturers even increased their sales in Germany. Overall domestic consumption fell 10 percent, confirming weak investment in Germany.
Capacity utilization slips to 73 percent as headcount falls to 60,600
Capacity utilization fell further to 73 percent. The adjustments are now visible in employment: in March the industry employed 60,600 people, almost 9 percent fewer than a year earlier.
Geis described the order increase as an important signal but not an all-clear. In his view, a stable upswing requires renewed investor confidence and more reliable economic conditions.