Incoming orders to the German machine tool industry suffered a sharp fall of 46 percent in the second quarter (Q2) of this year from a year earlier, mainly due to the coronavirus pandemic and the associated lockdown, according to data from the industry's association on Wednesday.

Data in April-June showed that orders from the German domestic market fell by 36 percent and foreign orders fell by 51 percent compared to the same period last year, said a statement from the German Mechanical Engineering Industry Association citing the latest data from the German Machine Tool Builders' Association (VDW).

The VDW pointed to a decline in the sales of customer industries such as the aviation and the automotive industry, as well as short-time employment arrangements, temporary production shutdowns and liquidity bottlenecks for many companies during the period.

However, the statement said that the industry may have passed the low point for its order intake, as figures in June are up noticeably from the previous two months.

This added to other positive signs in the broader manufacturing sector in July, when the Purchase Managers' Index, a key economic barometer, rose almost across the board in China, the United States and several eurozone major economies.

While many expect a slight recovery in the second half of the year, Wilfried Schaefer, managing director of the VDW, pointed out that it will take longer for the trend of recovery to reach the machine tool industry, which defines itself as a late-cyclical sector.

Schaefer said that companies related to medical technology and electronics, as well as parts of the mechanical engineering sector, are likely to fare better than others. He added that "a great deal of uncertainty" still remains regarding the risks of a second wave of infections, making reliable forecasts hardly possible at the moment.

Source: Xinhua