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For 2023, the German Mechanical Engineering Industry Association expects the challenging environment will not change: the war in Ukraine continues to bring high energy prices, and central banks around the world are responding to high inflation rates by raising interest rates. "This will put pressure on the global economy, and therefore on the capital goods industry in the foreseeable future," said VDMA Chairman Haeusgen. "Nevertheless, in recent weeks the mood in many countries around the world is not as negative as it was in the first few months after the war in Ukraine began. Therefore, we expect actual production to decline only slightly by 2% in 2023. Compared to earlier growth declines, this is a modest decrease in production and significantly lower than many feared." He shares this assessment with many entrepreneurs in the industry: according to the survey, nearly half of respondents (48%) are optimistic or cautiously optimistic about the new year. 38% remain hesitant, and only 14% hold pessimistic or cautiously pessimistic views.
This confidence is also reflected in the industry's employment situation. In September 2022, the core workforce of German mechanical and plant engineering industry (companies with more than 50 employees) totaled 1.019 million, growing 1.0% year-over-year. Therefore, this sector remains the country's largest industrial employer. Among mechanical engineering companies surveyed by VDMA in autumn, more than half (54%) actually hope to expand their workforce next year, while 30% hope to maintain current levels. However, companies still struggle to fill these positions. The widespread shortage of skilled workers means that virtually all surveyed companies (97%) face bottlenecks in this regard.
Production in the mechanical and plant engineering sector continues to be significantly affected by supply chain difficulties and material bottlenecks. According to the latest VDMA rapid survey in early December, with over 600 member companies participating, 74% of companies consider their business activities severely or noticeably affected by such bottlenecks. However, in June this figure was 87%. In the latest survey, these companies reported that the situation has clearly eased for chemicals, plastics, and metal products. On the other hand, the situation for electronic components remains tense, though showing a declining trend.
