Market conditions: Despite slowdown, German machine makers await solid 2008

The VDMA, the acronym for Germany’s trade group of machinery manufacturers, notes that after a record production year in 2007 and good orders booked in the first quarter of this year, the financial turbulence that is engulfing some industries, including building/construction and finance, has reared its head in the capital goods markets, with Germany’s plastics processing machinery manufacturers seeing a drop-off in orders in the second half of this year, albeit from the record level set in 2007. For January-June 2008 orders dropped by about 7% from the record level set in 2007, though exports this year did increase by 12.2%, mostly due to strong demand in the European Union and Asia. Despite signs of a slowdown, the group still says it expect sales (combined at its members) to come in this year about 8% higher than in 2007. The outlook for 2009 is not as rosy as orders in the second half of 2008 have slowed.