German engineering firms hit by 8% order slump amid geopolitical tensions

Domestic orders fell by 16 percent, while foreign demand declined by 11 percent. The most stable performance came from customers in the eurozone, where orders actually rose by 6 percent.

Johannes Gernandt, chief economist at the VDMA engineering association, attributes the slump to uncertainty stemming from geopolitical conflicts—now compounded by the escalation in Iran. According to the association's latest business climate survey, corporate sentiment has continued to deteriorate.

Over the less volatile three-month period from December 2025 to February 2026, companies recorded an 8 percent real drop in orders compared to the same period a year earlier. Domestic orders fell by 6 percent, while foreign orders were down by 8 percent.