The backbone of Germany's economy, the nation's machine tool sector, has suffered from sluggish exports as the global economic recovery still lacks momentum. But experts said 2014 prospects were much better.
Falling foreign demand saw orders for the German mechanical engineering sector go down markedly in October, a survey by the national engineering industry association, VDMA, showed Monday.
The manufacture of machine tools has long been an essential indicator of the country's overall industrial and export performance.
The report said overall incoming orders declined by 10 percent in the month under review, compared with October 2012. VDMA noted exports tumbled by 14 percent, while domestic demand was down only 2 percent.
"The decline in foreign orders is primarily attributable to slim demand from non-eurozone nations and is possibly a reaction to currency turbulence in a number of developing countries, VDMA Chief Economist Ralph Wiechers said in a statement.
In a three-month comparison aimed at ironing out short-term fluctuations, overall orders dropped by 4 percent from August to October, with foreign demand shrinking by 8 percent year-on-year.
Despite current problems, the association expected full-year orders to pick up by 3 percent throughout next year. The German machine tool sector is dominated by small and medium-sized companies, but also embraces listed heavyweights such as ThyssenKrupp, DMG Mori Seiki (formerly Gildemeister) and Gea.
hg/ccp (dpa, AFP, Reuters)