The German Machine Tool Builders’ Association (VDW) has released a new report on the current state of the German machine tool industry. The findings reflect a sluggish market, with an uptick in orders not anticipated until 2026.
New figures show that German machine tool orders in Q2 2025 remained flat YoY. Domestic orders fell 14% compared with Q2 2024, while foreign orders rose 7% over the same period. This reflects a minor improvement compared to Q1 2025, when total orders fell 10%, domestic orders decreased 30%, and foreign orders were flat YoY.
Between January and June 2025, total orders fell by 5% compared with the first half of 2024. During the same period, domestic orders dropped by 22%, while foreign demand grew by 4%.
Dr. Markus Heering, Executive Director of the VDW, explained that weak demand is being driven by continuing uncertainty around U.S. tariff policies and “many other crises” around the world. These have caused investors to delay orders and take a “wait-and-see approach.”
Despite a slow start to 2025, the VDW forecasted a “brightening” medium-term outlook. It noted that the increases in defense and infrastructure spending, along with a recently adopted investment package, could boost customers’ willingness to make new purchases.
What’s more, the ifo business climate index, which measures monthly business sentiment in Germany, is signalling an improvement in the German manufacturing industry. Meanwhile, the international Purchasing Managers’ Index (PMI) suggests that the industrial sector slump is bottoming out.
However, the DVW stated that these positive signals do not represent the “hoped-for turnaround” in German machine tools this year. “The recovery of the machine tool industry has been put back once again,” commented Heering. “We do not anticipate a return to stable growth until 2026.”
The German machine tool industry experiences order slump
The German machine tool industry ranks among the five largest specialist groups in the mechanical engineering sector. In 2021, Germany held a 13.4% share of the global market, placing it behind only China and Japan. By 2024, the country’s industry employed 65,300 people and produced machines and services worth €14.7 billion.
However, global macroeconomic uncertainties have led to a slump in demand this year. “The main impetus in the first half of the year came from Europe, although demand levels have not yet picked up in the domestic German market,” explained Heering.
This poor performance has been largely attributed to the Trump administration’s mercurial tariff policies. Last month, the United States signed a new trade deal with the EU, agreeing to 15% tariffs for European exports to America. This is half of the 30% import tax rate the White House had initially threatened against European imports. However, despite this slight improvement, the VDW asserted that the 15% figure will increase costs and inhibit German exports to the U.S., its largest market.
“U.S. industry urgently needs our machines because no comparable domestic alternatives are available, yet small and medium-sized US companies in particular will not be able to pay the higher prices,” Heering added. “The tariff policy of the U.S. is harming its own economy the most – which will not be providing any great impetus in the near future.”
Amid these challenges, machine tool sales fell by 9% YoY in the first six months of 2025. However, optimism remains for the upcoming EMO Hannover trade fair, which will run between September 22-26, 2025. With more than 1,500 exhibitors expected, Heering anticipates the event will “provide crucial impetus.”
Looking ahead to 2026, the VDW expects stronger domestic demand to deliver a much-needed boost. However, ongoing tariff uncertainties will likely keep international trade weaker than previously anticipated.
3D printing market performance
Amid poor performance for German machine tools in 2025, the additive manufacturing sector is experiencing mixed market performance.
According to market intelligence firm CONTEXT’s Q1 2025 report, total revenues across all 3D printing categories increased by 5% YoY. This was driven by a 22% surge in entry-level 3D printer shipments, particularly from Shenzhen-based Bambu Lab, which recorded an impressive 64% increase in shipments.
However, higher-level 3D printers continued to face headwinds. The industrial segment, which includes machines priced above $100,000, experienced a 14% YoY decline in shipments, down 12% on a trailing twelve-month (TTM) basis. Meanwhile, midrange 3D printers costing between $20,000 and $100,000 saw shipments fall 16% YoY.
Orders of professional-class printers ($2,500–$20,000) fell 4% YoY in Q1 2025, amid a clear shift in technology preferences. Notably, professional FDM 3D printer shipments plunged 31% as buyers favored more affordable entry-level models.
In April, Wohlers Associates released its 2025 Wohlers Report, a key source of additive manufacturing (AM) market intelligence. The data shows the global AM industry reached $21.9 billion, including $4.4 billion from materials, $6 billion from machine sales and related services, $10.1 billion from printing services, and $1.4 billion from software.
The report projects the 3D printing market to grow at a compound annual rate of 18%, potentially reaching $115 billion by 2034. Market volatility could limit growth to about $84 billion, while a faster recovery could push the total to $145 billion.
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Featured image shows order bookings in the German machine tool industry. Image via the VDW.
