German machinery orders up in Q1 on strong March

New orders for Germany's mechanical engineering sector rose by 4% in real terms in the first quarter thanks to strong growth in March, according to figures released by the VDMA industry group on Wednesday.

Following weak demand in January and February, the sector saw a 27% rise in large-scale orders in the last month of the quarter compared to March last year, which boosted overall figures for the quarter.

But VDMA chief economist Johannes Gernandt warned against premature optimism, noting that these "one-off effects do not mark the start of a broad-based recovery, but merely gloss over the situation."

The March surge was particularly driven by new orders from non-eurozone countries, which were up 42%, compared to a 2% rise in orders from eurozone countries.

Gernandt said that urgently "needed structural reforms in German and European politics are missing for a lasting upturn."

Germany's export-oriented economy narrowly avoided a third consecutive year of recession in 2025, as businesses struggle with high energy prices, dwindling demand and a shortage of skilled workers.

The current geopolitical situation is also weighing on mechanical engineering firms, the VDMA noted.

"The wars in the Gulf region and in Ukraine, new tariff threats from the US and many uncertainties in supply chains continue to ensure that investment is lacking – something that many sub-sectors of the mechanical and plant engineering industry are feeling acutely," Gernandt said.