German mechanical engineering and plant construction will set up a new production record of about 158 billion Euros in 2006 which corresponds to a seven percent increase. Thus, in real terms German mechanical engineering has grown by 18% in the period from 2004 to 2006, as is estimated by the German Mechanical Engineering Association (VDMA).
The year 2006 has been much more successful for German mechanical engineering and plant construction than previously expected. Thus, until October 2006 foreign demand kept at a permanent high level and in real terms even surpassed the high level of 2005 by 14%. Domestic demand has grown by 21% this year. German wage policies, which were quite reserved as compared to those of European neighbours, have even led to falling unit labour costs so that this branch of German industry has been able to strengthen its international leadership.
In the meantime 38% of German companies operating in the field of mechanical engineering have been reporting about production problems due to their running at full capacity. One in ten companies need additional technical capacities, even though investments made by this branch of industry over the last three years have been increased by almost 25 percent.
Ten percent of German mechanical engineering companies lack skilled personnel. In September 2006 the core personnel of German mechanical engineering amounted to 883.000 people. Their lowest number with 857.000 employees was reached in June 2005.