VDMA Monthly bulletin August 2016 | Volkswirtschaft und Statistik Monthly bulletin

VDMA Incoming orders in Germany Mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin Decent results for the first half of the year In June, incoming orders were up by a gratifying 6 percent on the previous year. Development over the first half of 2016 as a whole was also decent – the order level grew by 3 percent year on year overall. Only demand from the euro zone declined (down 4 percent). This and a steady order backlog of just under six months secure turnover and production for the months to come. However, the latest political developments – Brexit, the attempted coup in Turkey – sound a note of caution. August 2016 Page 2 |

VDMA Production of German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin The figure for May was +2.7 percent. In total, production grew by 1.1 percent in the first five months of The latest political developments sound a note of caution – so the forecast remains one of “stagnation for 2016 as a whole”. August 2016 Page 3 |

VDMA Capacity utilization in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin Capacity utilization stood at 83.3 percent in July 2016, only just below the long-term industry average. The record low since 2011 was 83.3 percent in July The all-time high was reached in July 2011 at 89.9 percent. August 2016 Page 4 |

VDMA Employees in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin In May 2016, the number of permanent employees in the mechanical engineering industry remained constant compared with the previous month. The year-on-year growth amounted to 0.4 percent. The figures for short- time work for 2015 are now available. The number of short-time workers was 24 percent lower than in Following a low in December, preliminary projections suggest that the number of short-time workers increased again in the first quarter of The low in employment since 2011 was 909,000 people in January 2011; the record high was just under 1,019,000 in September August 2016 Page 5 |

VDMA German machine export | Volkswirtschaft und Statistik Monthly bulletin German exports of machinery shrank by 4.4 percent year on year in nominal terms in May For the first five months of the year, they were down by 1.7 percent. Of the 20 most important export markets, only Spain, Turkey, India and Mexico grew in May. It will not be known with certainty until a few months from now if export business with EU countries is really worsening. Experience has shown that the internal trade figures for any reporting month are later revised upwards by around 5 percentage points. Of the largest sectors of mechanical engineering in the export business, only foreign exports from power systems, agricultural machinery, and food processing and packaging machinery exceeded the previous year’s figure. August 2016 Page 6 |

VDMA Incoming orders in Germany for selected subsectors | Volkswirtschaft und Statistik Monthly bulletin In the last three statistically documented months (April-June 2016), 14 of the sectors accounted for separately in the VDMA’s incoming order statistics posted growth. Six sectors achieved growth rates of 10 percent or more. This includes construction equipment and building material machinery, foundry machinery, measuring and testing technology, machine tools, lifts and escalators, and electrical automation. However, textile machinery, machinery for metallurgical plants and rolling mills, and mining equipment recorded downturns of 30 percent or more. August 2016 Page 7 |

VDMA Orders on hand in German mechanical engineering | Volkswirtschaft und Statistik Monthly bulletin The order backlog for the mechanical engineering industry was 5.8 production months in June 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 utilization. On the other hand, lead times and supply bottlenecks for customers are not likely to be a real problem. August 2016 Page 8 |

VDMA Business situation and expectations Manufacturing industry in Germany | Volkswirtschaft und Statistik Monthly bulletin The business climate index in the manufacturing industry receded in July. Although industrial companies were happier with their current business situation, they were noticeably less optimistic about the coming months. August 2016 Page 9 |

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

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