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Mechanical engineering receives 70 percent more orders

Mechanical engineering is increasing the pace after an order increase of 70 percent. Tight supply chains make the company continue to worry.

The German machine builders picked up the pace exceptionally fast in April. Companies received 72 percent more orders than in the weak month of the previous year, as the industry association VDMA announced on Wednesday in Frankfurt.

“The base effect plays a decisive role in these high growth rates,” explained VDMA chief economist Ralph Wiechers. “In April 2020, the companies posted a particularly sharp fall in orders of 31 percent as a result of the pandemic.” However, the high rates also signaled that the economic upswing is continuing to gain strength.

Supply chain problems burden industries around the world

Domestic orders increased by 60 percent in April, and 78 percent more orders were received from abroad. Nevertheless, the picture is not clear. “We are worried about the currently very tense supply chains,” said Wiechers. Problems in the supply of materials and parts are currently burdening the industry worldwide.

In the less volatile three-month period from February to April, orders increased by 34 percent compared to the previous year. In the Corona year 2020, the export-oriented German key industry recorded the sharpest drop in orders since the financial crisis.

The industry assumes that it will at least partially make up for the massive corona setback in the current year. The VDMA recently expected a price-adjusted growth in production of 7 percent, after a slump of around 12 percent in 2020.

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