The extension of geopolitical conflicts to Iran weighs on German mechanical engineering. After a recovery in the fourth quarter of the previous year, this sector considered the pillar of the German economy suffered a “significant” shutdown in February, the professional federation VDMA announced on Wednesday. Order intake fell 12%, with a decline of 16% domestically and 11% internationally. “Geopolitical conflicts have been weighing on our activities for some time now, and now the war in Iran is adding to the uncertainty,” explained Johannes Gernandt, chief economist at the VDMA. “For the global investment climate, all these clashes constitute a heavy burden that is clearly being felt.”
Overall, business morale has deteriorated slightly. A survey of member companies in March revealed that about a quarter of the 881 companies surveyed rated their current situation as “very good” or “good”. At the time of the poll at the end of January, this figure was still close to 30%. This slowdown, however, remains moderate, which allows us to maintain the hope of a timid economic recovery during the year, specified Mr. Gernandt.
(Reporting by Anneli Palmen, editing by Philipp Krach. For questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for business and markets).)
