VDMA Monthly bulletin February 2016 | Volkswirtschaft und Statistik Monthly bulletin

VDMA Incoming orders in Germany Mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin Strong boost in December secures annual result for 2015 Incoming orders in the mechanical engineering industry shone with a double-digit growth rate at the end of the year. While domestic demand was again forced to deal with a decline in December, orders from abroad provided a high growth rate thanks to the large-scale systems business in non-euro countries. Additional support came from the euro area partner countries. In short, mechanical engineering firms closed their order book for 2015 with growth of 1 percent. February 2016 Page 2 |

VDMA Production of German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin In the first eleven months of the past year, production of machinery and equipment in Germany was still 0.5 percent below the previous year. The forecast revision in July 2015 from 2 percent to 0 percent following massive corrections to the German Federal Statistical Office’s production indices for mechanical engineering is therefore still within reach. The VDMA economists are likewise forecasting stagnation in the current year. February 2016 Page 3 |

VDMA Capacity utilization in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin Capacity utilisation stood at 83.6 percent in January 2016, which was only just below the 50%-scatter band and also represented the absolute low since The absolute high since 2011 was achieved in July 2011 at 89.9 percent. February 2016 Page 4 |

VDMA Employees in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin The number of permanent employees in the mechanical engineering industry has dropped by a few hundred in November. Rounding to thousands results in one thousand employees less compared to October. Compared to last year growth is next to zero, a mere 0.2 percent in November like in October. The most recent figure for short-time-workers (June 2015) fell to little above 8'000, which has been the lowest value since September February 2016 Page 5 |

VDMA German machine export | Volkswirtschaft und Statistik Monthly bulletin Exports of German machinery grew by exactly 4 percent year on year in November 2015, resulting in a cumulative increase of 2.4 percent in the first 11 months of the year. The strongest growth was posted by the North American NAFTA region with 14.6 percent. In Europe, the EU-28 countries recorded a 5.9 percent increase and the EURO-19 grew by 4.5 percent. The “rest of Europe” posted a decline of 9.7 percent. The sharpest downward trend was in Russia (26.8 percent decrease). While exports to Switzerland stagnated, exports to Turkey grew by 11.3 percent. China posted a decline of 5.7 percent over the course of the year, while Southeast Asia was down 8.3 percent. One glimmer of hope in the Far East was South Korea with growth of 10 percent. Saudi Arabia and the Emirates continued to record growth. South America did not emerge from its downward trend. February 2016 Page 6 |

VDMA Incoming orders in Germany for selected subsectors | Volkswirtschaft und Statistik Monthly bulletin In the last three statistically documented months (October to December 2015), 11 of the sub-sectors accounted for separately in the VDMA’s incoming order statistics posted growth. Four sub-sectors achieved growth rates of 20 percent or more. These were power systems (turbines), process plant and equipment, mining equipment, and lifts and escalators. However, woodworking machinery, machinery for metallurgical plants and rolling mills, and foundry machinery recorded downturns of 20 percent or more. February 2016 Page 7 |

VDMA Orders on hand in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin The order books in the mechanical engineering industry stood at 5.7 production months in October An order range of just under six months is a good figure for the mechanical engineering industry, in view of an average throughput time of around three-and-a-half months due to reasons of technology. It shows that there are some order blocks here and there to ensure satisfactory levels of capacity utilisation, On the other hand, lead times and supply bottlenecks for customers are not likely to be a real problem. February 2016 Page 8 |

VDMA Business situation and expectations Manufacturing industry in Germany | Volkswirtschaft und Statistik Monthly bulletin In January 2016, the business climate index in the manufacturing industry reached its lowest level for a year. The positive assessment of the current situation was reduced slightly. Meanwhile, industrial companies significantly lowered their optimistic expectations. While the chemical industry benefited from the low oil price, sentiment turned gloomier in many other sectors, such as mechanical engineering and automotive manufacturing. February 2016 Page 9 |

VDMA Economic situation of German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin February 2016 Page 10 |

VDMA| Volkswirtschaft und StatistikPage 11 | February 2016 Contact. Dr. Ralph Wiechers VDMA Volkswirtschaft und Statistik Lyoner Str Frankfurt Phone Monthly bulletin