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Mechanical Engineering Industry Machinery Exports Suffer from Corona Pandemic

Editor: Nicole Kareta

Machinery exports are increasingly affected by the Corona pandemic. In the first quarter of 2020, they shrank by 6.6 % to 41.9 billion euros.

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In the first three months of this year, machinery exports from Germany to the EU-27 were 8.5 % below the level of the previous year.
In the first three months of this year, machinery exports from Germany to the EU-27 were 8.5 % below the level of the previous year.
(Source: gemeinfrei / Pixabay )

Machine exports from Germany are increasingly affected by the corona crisis. In the first quarter of 2020, they fell by 6.6 % to 41.9 billion euros compared with the previous year. While in January and February they had only missed the previous year's figures by 3.9 and 4.4 % respectively, in March they fell by 11 %. "In the first two months of this year, with the exception of exports to China, the effects of the corona crisis are unlikely to have been reflected in the export figures. This changed abruptly in March," says VDMA economic expert Olaf Wortmann.

In the first three months of this year, machinery exports from Germany to the EU-27 were 8.5 % below the level of the previous year. The export business with countries badly hit by the corona virus such as France (minus 14.8 %), Italy (minus 16.1 %) and Spain (minus 13.9 %) was particularly disappointing during this period. Here too, the decline in January and February was still quite moderate. But in March, German machinery exports to Spain, Italy and France fell by 25 to 33 % year-on-year. Almost 15 % of all German machinery exports go to these three countries alone.

Poland - A small ray of hope

"The decline in exports to the EU partner countries could be in double figures in the coming reporting months, because already in March German mechanical engineering companies recorded a minus of more than 21 % in exports to the EU," reports Wortmann. However, with growth of more than 8 % in the first quarter of 2020, German machinery exports to Poland are currently bucking the trend. The Eastern European country has thus moved past Austria, the Netherlands and Italy in the ranking and now occupies 4th place among the most important target countries for machine exports from Germany. But also for deliveries to Poland, the March result was a double-digit minus (minus 14.2 %).

Export expectations for China and the USA differ

The two most important individual markets for German machinery exporters, the United States and China, were affected to varying degrees by the corona spread in the first quarter. From January to March, the United States even managed to slightly increase its high prior-year figure by 0.5 %. "Here, it certainly plays a role that President Trump did not declare a national state of emergency until March 13," analyses VDMA economic expert Wortmann. In contrast, business in China declined by 8.9 % in the first quarter. However, the previous year's level was only just missed in March with a decline of 1.1 %. "For the future, we expect the two largest export markets of the mechanical engineering industry to develop in the opposite direction. We see a slight easing trend in machinery exports to China. On the other hand, the picture in the USA, which was still positive up to March, has already become much gloomier. Our current Corona flash survey also shows that demand from the USA is likely to decline," Wortmann sums up the situation.

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