German mechanical engineering companies are still struggling with customer restraint.

In May, orders fell by 27 percent compared to the same month last year, according to the German Engineering Federation (VDMA) on Monday. While orders from abroad shrank by 16 percent, the drop in domestic orders was as high as 44 percent. The industry, which includes numerous SMEs as well as listed companies such as Thyssenkrupp and Gea, had recorded a plus for the first time in April.

According to VDMA economic expert Olaf Wortmann, a large part of the current decline can be attributed to the fact that there were an exceptionally high number of orders for large-scale systems from Germany in May 2023. "However, we are still experiencing a pronounced weakness in investment in Germany in particular, while the decline abroad can be explained by the usual fluctuations on a monthly basis."

(Report by Tom Käckenhoff, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).