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In 2020, the German mechanical engineering industry’s decade-long growth phase came to a temporary halt, declining by 9% to €13.9 billion.
Richard Clemens, Managing Director of the VDMA (German Mechanical Engineering Industry Association) Food Processing and Packaging Machinery Division, stated: “The drop in output was not unexpected, as 2019 was an exceptionally strong year for our sector. Even without the pandemic, it would have been difficult to surpass that high level.” In the packaging machinery segment, total production fell by 8% to €6.7 billion. Within food processing machinery, performance varied significantly across sub-sectors. Output of meat processing machinery rose slightly, exceeding €1.2 billion, while demand for bakery machinery remained stable. Strong domestic business in these two sub-sectors more than offset the decline in exports. In contrast, confectionery machinery production dropped by 18% from the previous year’s high level, and beverage machinery also saw a double-digit decline. “These two sub-sectors are highly active in non-European countries—many of which were severely affected by the pandemic. Moreover, their customers include numerous multinational corporations that simply put their investment plans on hold,” Clemens explained when addressing these divergent trends.
The Pandemic Weakened Export Business
In 2020, total exports of food processing and packaging machinery declined by 8%, falling to €8.5 billion. The extent of the decline varied widely among sub-sectors: manufacturers of packaging machinery, meat processing equipment, and bakery machinery recorded modest drops of 5% to 6%. However, exports of confectionery machinery plunged by 24%, and beer machinery exports plummeted by 38%.
From a regional perspective, foreign shipments of food processing and packaging machinery declined in nearly all economic regions in 2020—except North America. Deliveries from Germany to the United States grew by 8%, surpassing €1.2 billion. Positive momentum also came from key markets such as Russia, Mexico, and China. However, shipments to the EU-27—the industry’s most important sales region—dropped by 15%, and exports to Asia also fell sharply by double digits.
“Based on current estimates, a return to 2019 levels in 2021 is unlikely,” Clemens noted. “We do expect production to grow this year, but a double-digit increase is improbable.” Nevertheless, Clemens expressed overall optimism for the sector, citing its strong international positioning and continued global demand for processed and packaged food, beverages, cosmetics, and pharmaceuticals.
