Machinery & Equipment

Mechanical engineering is said to be a reflection of the German economy. Aside from the automotive industry, mechanical and plant engineering is the sector most closely tied to the attribute “Made in Germany“. Predominantly driven by medium-sized companies, the sector stands for innovation and strong export. Together with its companies, it has become the embodiment of German economic structures in recent years. After many years of strong growth, the mechanical engineering sector initially stalled in 2013. Sales and production volumes largely remained on the same level of the previous year. Following the dry spell, the engineering association VDMA is predicting renewed strong growth in the mechanical engineering sector for 2014.

Mechanical engineering is driven by the global economic recovery that continues to expand. This trend is lead in particular by the established markets, most notably the USA as well as the euro area member states. Export is one of the main drivers of the mechanical engineering industry. It accounts for a considerable share of sales. In the global comparison, German mechanical engineering is now considered a world champion of exports. Even though the competitors are catching up, the Federal Republic of Germany continues to be well ahead of China and Japan, which must be seen as the fiercest competitors.
Meanwhile, more than 16 percent of all plants exported globally are plants that were manufactured in Germany. German mechanical engineering companies are selling nearly 80 percent of their products on foreign markets. In late 2013, the engineering association VDMA again published figures that support the further growth of business. Accordingly, exports rose again by seven percent in October 2013. Sales to the NAFTA region, which includes the USA, Canada and Mexico, were even stronger, with a total gain of ten percent.
Based on the latest forecasts for 2014, the sales volume is expected to be 218.18 billion euros. Mechanical engineering is projected to increase significantly by 2016, resulting in a considerable rise of sales in the industry to 235.41 billion euros.

Thanks to a growing number of companies and a pronounced innovative capacity, mechanical and plant engineering has evolved to become the main driver of the capital goods industry. It is the heart of industrial performance and is now considered part of the Old Economy. The industry has been transformed almost from the ground up in recent years. The image has changed, focusing more than ever on strong exports. To meet the latest challenges, mechanical and plant engineering is increasingly merging with the virtual world, thus becoming a piece of high-tech. In fact, the sector might very well become the key to the next industrial revolution, Industry 4.0. After the development of the steam engine, the development of mass production and automation of production, the integration of process control and information technology is now set to achieve a new innovative head start. The use of modern technologies is essential for mastering this development milestone.
Alongside a favourable and equally promising outlook, the mechanical and plant engineering industry is faced with major challenges:

• climate change, scarcity of resources, demographic development, European integration, shifts in international economic relations increase the pressure on the industry to boost its competitiveness and innovative capacity. A considerable boost of the latter is the only way companies can remain competitive in the long term.
• Especially the shift toward Asia additionally increases the international pressure to compete.
• Yet, high development costs and long project terms can likewise cause critical project bottlenecks.

Optimising the development processes is vital in mechanical and plant engineering.