The mood in mechanical and plant engineering has improved significantly in the third quarter of 2026. About 34 percent of companies rate their current situation as 'good' or 'very good' (July: 28 percent). In contrast, around 22 percent assess their situation as 'bad' or 'very bad'. The outlook has also noticeably brightened: 33 percent expect an improvement in the next six months (July: 25 percent), while only 10 percent anticipate a deterioration.
The increasing optimism is also reflected in revenue expectations: In the current year, around 57 percent of companies expect a nominal increase in revenue. 22 percent expect stagnation, and 21 percent expect a decline. For 2027, companies are even a bit more optimistic: 62 percent consider nominal revenue growth to be possible.
'The results of the recent economic survey give reason for cautious optimism. Nevertheless, the environment for mechanical and plant engineering remains challenging. Geopolitical upheavals and intensified competition with China are pushing many companies to their limits. The costs at the location Germany are too high. Politics must finally resolve the reform backlog at the location Germany,' comments VDMA Chief Economist Dr. Johannes Gernandt on the results.
Key customer industries continue to weaken - Electrical industry sets positive impulses
The business prospects in customer industries remain very diverse. Strong growth impulses are mainly coming from smaller customer sectors such as the defense industry, aerospace, and medical technology. The electrical and electronics industry continues to benefit from high AI investments. Additionally, mechanical engineering is being viewed a bit more positively as a customer again. In contrast, the outlook in the automotive and chemical industries remains weak due to intense international competition. This also heavily burdens the mechanical engineering sectors that are strongly dependent on the automotive industry, such as robotics and automation. The current situation is still assessed as mixed there. However, the outlook has noticeably brightened, also thanks to positive impulses from sub-sectors like industrial image processing. The construction industry remains cautious despite slight improvements.
Job cuts remain a core issue
Job cuts are likely to continue in the coming months due to the difficult and uncertain framework conditions. Although more than half of the companies (52 percent) expect a stable core workforce, more than 30 percent feel compelled to reduce positions. Less than one in five companies plans additional hiring (18 percent). 'The numerous shocks of recent years and the transformation of the industry have left significant marks on companies. This is also reflected in employment: Since 2019, around 100,000 jobs have been lost in mechanical and plant engineering in Germany,' says Dr. Gernandt.
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