East German mechanical engineering sector running out of steam

The economic development of the eastern German mechanical and plant engineering sector continues to lose momentum. Only 62 percent of companies still rated their overall situation as positive in the third quarter, according to the eastern branch of the German Engineering Federation (VDMA) on Thursday. In the first quarter, it was still 78 percent, at mid-year 68 percent. According to the association, this is the result of a survey among the 350 members in Berlin, Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia.

"The order cushion of the companies is melting, at the same time, customers are investing less in new machines and products. This is increasingly putting the industry in a tight spot," said Oliver Köhn, managing director of VDMA East. About one in five companies (22 percent) expect their business outlook to worsen compared to before,

Almost a quarter of companies plan to cut jobs, twice as many as in the previous quarter, according to the survey. "So far, companies have held on to or even increased their workforces despite the many challenges, partly due to the skills gap. Therefore, I view the change of course with great concern," Köhn stressed.