VDMA: ‘Confidence returning’ to German machinery makers

Frankfurt, Germany – Confidence among German machinery and equipment manufacturers improved significantly in the third quarter of 2026, According to the latest survey by industry association VDMA.

Around 34% of companies rated their current business situation as "good" or "very good", up from 28% in July, VDMA reported 14 Oct.

Meanwhile, 22% assessed their situation as "poor" or "very poor", the association reported.

The outlook also improved, with 33% of companies expecting business conditions to strengthen over the next six months, compared with 25% in July.

Only 10% anticipated a deterioration, VDMA added.

The improving sentiment was reflected in sales expectations, with 57% of companies forecasting nominal sales growth in 2026.

A further 22% expected sales to remain unchanged, while 21% anticipated a decline.

For 2027, the outlook was slightly more positive, with 62% of respondents expecting nominal sales growth.

"The results of the latest economic survey give grounds for cautious optimism," said Dr Johannes Gernandt, VDMA chief economist.

"Nevertheless, the environment for machinery and equipment manufacturing remains challenging," he warned.

According to Gernandt, geopolitical upheavals and intensified competition with China “are pushing many companies to their limits.”

"Costs in Germany are too high. Policymakers must finally resolve the reform backlog in Germany," Gernandt added.

VDMA went on to add that growth momentum remains uneven across customer industries, with defence, aerospace and medical technology providing positive impetus.

The electrical and electronics industry is also benefiting from high levels of investment in artificial intelligence, while machinery and equipment manufacturing itself is being viewed "somewhat more positively" as a customer sector.

By contrast, prospects in the automotive and chemical industries remain weak, reflecting "intense international competition".

This is also affecting machinery manufacturers heavily dependent on the automotive sector, including the robotics and automation industry.

While conditions in that segment remain mixed, VDMA noted a brighter outlook, supported partly by positive developments in machine vision technologies.

The construction industry, meanwhile, remains subdued despite slight improvements.

Employment continued to be a concern, with more than 30% of machinery manufacturers expecting to reduce their workforce in the coming months.

While 52% anticipate maintaining current staffing levels, only 18% plan additional recruitment.

"The numerous shocks of recent years and the transformation of industry have left clear marks on companies," said Gernandt.

"This is also evident in employment: since 2019, around 100,000 jobs in machinery and equipment manufacturing have been lost in Germany," he added.