Output in Germany's engineering sector fell by nearly a quarter last year, worse than the industry's most pessimistic forecast, and is not expected to rebound in 2010, the VDMA industry association said.
Production was expected to decline around 20 per cent last year but orders for machinery fell at their fastest rate since the VDMA started compiling its statistics in 1958.
Germany, which is heavily dependent on foreign trade for growth, was hit especially hard by the global crisis last year, when the economy shrank by a record 5 per cent. That hit big companies in the sector including Siemens, ThyssenKrupp and MAN.
Machinery for construction and construction materials bore the brunt of last year's slump while equipment used for mining and steel production saw the steepest rise, the VDMA said today.
"For 2010, we expect all in all similar levels of production and sales volume with a slightly positive trend in the course of the year," it said.
VDMA president Manfred Wittenstein told reporters he expected declines in production and sales would continue in the early part of this year, offset by a slightly positive trend forecast for the latter part of 2010.
Last week data showed German manufacturing orders fell sharply in December from the previous month, a surprise blow to recovery led by a decline in foreign demand.
But the Markit composite purchasing managers' index (PMI) showed a rise in output helped German manufacturing activity expand in January at its fastest rate since May 2008, supporting growth in the private sector of Europe's largest economy.
Reuters