The mechanical and plant engineering sector in Germany experienced a significant downturn in its order books in February. Overall, orders fell by 12 percent compared to the previous year, with domestic orders down 16 percent and foreign business recording a decline of 11 percent. Only orders from Euro partner countries saw an increase of 6 percent, while orders from non-Euro countries decreased by 17 percent. 'Geopolitical conflicts have been affecting our business for some time, and now the Iran war has added further uncertainty. All these conflicts are a heavy burden on the global investment climate, which is clearly noticeable,' says VDMA Chief Economist Dr. Johannes Gernandt.
In the less volatile three-month period from December 2025 to February 2026, companies recorded an order decline of 8 percent compared to the previous year. Domestic orders fell by 6 percent, while foreign orders were 8 percent below their previous year's value. Orders from Euro countries decreased by 2 percent, while orders from non-Euro countries were down by 11 percent.
The weak order situation is also reflected in the current VDMA economic survey: Overall, sentiment in mechanical and plant engineering has slightly deteriorated again. According to the survey conducted in March among member companies, about a quarter of the 881 companies assess their current situation as 'very good' or 'good'. In the survey from the end of January, this figure was still nearly 30 percent. About 26 percent of companies currently rate their situation as 'poor' or 'very poor'. The outlook has also suffered a setback. About a quarter of companies are optimistic about the next 6 months (January: 30 percent). 14 percent expect a further deterioration in business conditions (January: 9 percent).
This also affects the outlook: For the current year, around 52 percent of companies expect a nominal increase in sales, nearly 30 percent see stagnation as realistic, and nearly 18 percent expect a decline in sales. 'Not surprisingly, both the general assessment of the situation and the outlook for the next 6 months have deteriorated in the current environment. However, the setback is moderate, which keeps the hope for a timid economic recovery this year alive,' summarizes Dr. Gernandt.
'Nevertheless, it is now crucial that the governing coalition finally decides on and directly implements the long-announced reforms,' he adds. 'The time window until summer must be used! The time is ripe for a new agenda moment in Germany.'
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