The German Mechanical Engineering Industry
Mar 31, 2014
German machine and plant manufacturing is one of the five biggest industries in Germany. Judged by its more than 6'000 companies and roughly 970'000 employees (2012) it is the biggest industry of Germany ahead of the electrical equipment and vehicle manufacturing industries.
While vehicle manufacturing and electrical equipment are dominated by production of large series with standardized components, the single product and small series manufacturing prevails in mechanical engineering. Customized engineering brings mechanical engineering turnover per capita down to about 213'000 Euro.
Medium-sized companies and the corresponding decision structures are typical for mechanical engineering. 87 % of the companies employ less than 250 and only 2 % more than 1'000 persons. Two thirds of all companies have got even less than 100 employees.
Many of the small and medium-sized companies are world market leaders in their special fields of expertise.
The business of German mechanical engineering is export orientated. 77 % of machinery turnover is earned with sales to foreign customers. The machinery trade surplus (exports minus imports) amounted to 93 bn EUR in 2012. A growing globalization of the industry becomes also manifest in an increasing stock of foreign direct investment by the German machinery manufacturers as well as direct investment inflows from abroad in the German mechanical engineering industry.
Holding a share in global machinery trade of 15.9 % the industry is the leading supplier of machines, ahead of the USA and China. In 16 of 32 ME sectors the German machine and plant manufacturers are world market leaders.
German mechanical engineering is notorious for applying the most recent technologies. With its innovative products and services the industry helps its customers to stay competitive. In 2012 around a quarter of mechanical engineering turnover has been earned with new or significantly improved products. Seven out of ten of the mechanical engineering enterprises have introduced at least one new or significantly improved product and/or process in the years 2010 to 2012.
The sector's spending on innovation has been 13.3 bn Euro in 2012. That is significantly more than total spending on research and development, which amounted to 5.8 billion Euro the same year. The difference indicates the importance of spending on engineering and design, that is necessary to get the product to the market.
Well educated and highly motivated employees are the major asset of an industry with high level technical standards. German mechanical engineering employs more than 183'000 engineers and is such one of the most important employers of engineers in Germany.
The demand for engineers will continue to grow. The innovating mechanical engineering sector can maintain its international competitive position only as long as the future supply of excellent and skilled engineers is safeguarded.
But also most of the staff members without university degrees have undergone at least a qualified initial vocational training (Facharbeiterausbildung). In regard of qualification as well as flexibility the staffs of German mechanical engineering companies have been meeting increasing requirements for years.
Source: VDMA (Verband Deutscher Maschinen- und Anlagenbau - German Engineering Federation)