Trends in production and sales of German machinery industry 2008 - 2020

Trend of production after overcoming of the crisis in 2012: 5 years of stagnation, 1.5 years of growth, since October 2018 in crisis mode

The analysis of production and sales of the German machinery industry during the twelve years from 2008, the year of the breakout of the last world economic crisis, up to 2020 identifies three trends.

Update October 8th, 2021; first published August 27th, 2012 – The trend of production of the German machinery industry climbed out of the crisis low in 2012.

The trend is determined by the average of the monthly production indices of the last twelve months, marked as a dotted line in the diagram. The red oscillating line indicates the monthly production indices.

Trend of produktion exceeds pre-crisis level after ten years...

After the crisis low was overcome, a stagnation phase took place for five years, which ended in July 2017 with 102.0 index points. It was followed by a period of growth at a rate of 3.9% p.a. However, this growth lasted only until October 2018.

In October 2018, the production trend of 107.1 index points exceeded the pre-crisis level of 2008 (106.4 index points) for the first time.

So it took ten years to exceed the pre-crisis level in the annual trend. Although monthly production peaks at the end of each year had exceeded the pre-crisis level, they then fell back again and again.

The exceeding of the pre-crisis level in October 2018 also initiated a trend reversal.

...and then spins downwards at minus 3.8% p.a. into crisis mode

Since then, the production trend has been downwards with minus 3.8% per year. In December, the trend value of production was 102.3 index points, significantly below the pre-crisis level. This means that production in the German mechanical engineering sector is in crisis mode.

The slight growth trend that began in mid-2017 and a good year later drove production above the pre-crisis level has come to an end. The growth rate was 0.2% p.a.

Looking back at the production trend from the exceeding of the crisis low in 2012 to the end of 2019, the long-term stagnation in production development remains at 0.1% p.a.

Sales trend with slight growth from 2012 to 2018, since 2019 in crisis mode with minus 4.3% p.a.

The sales trend left the crisis low in 2012, then stagnated until the end of 2014 and finally developed a growth rate of 3% p.a. until May 2019 - over a period of almost five years.

But in May 2019 a turnaround set in, pushing the sales trend downwards into a crisis mode with a rate of minus 9.3% p.a. until end 2020.

Development of production and sales was not unexpected

At the beginning of 2019 the Quest Trend Magazine stated for the industrial production in Germany:

• “It is likely that the growth trend in 2019 will turn into stagnation, which could turn into a crisis. The reason for this follows initially from the global economy, which is characterized by a mixture of growth, stagnation and decline. This mix replaced a general economic upturn that used to follow a crisis. This situation is fragile and the factors for maintaining it are becoming weaker and weaker. These include the galloping national debt, mounting ever higher risks to continue. This includes industrial production in China, whose growth rates are slowing. This includes the aggressive US policy under Trump and the formation of a new, bipolar power structure in the world with the two major poles, the USA and China. All three factors are narrowing the global economy."  

This assessment was confirmed and even negatively exceeded. This shows the benefit of a long-term analysis with trends that are placed in the economic cycle.