• Orders in Germany's mechanical engineering sector fell 1% in May compared to the previous year, with domestic orders dropping by 3% and orders from eurozone partner countries slumping by 21%.
• Despite a 1% decrease in overall orders in May, orders from non-eurozone countries actually rose by 11%, providing some positive momentum for the sector.
• VDMA chief economist Johannes Gernandt attributed the decline in orders to customer concerns about global crises and the resulting threat of supply bottlenecks for raw materials, emphasizing the urgent need for reforms to support businesses.

Orders in Germany's mechanical engineering sector fell 1% in real terms in May compared with the same month a year earlier, weighed down by weak demand from eurozone partner countries, the Machinery and Equipment Manufacturers Association (VDMA) said on Thursday.

Domestic orders fell 3%, while orders from abroad rose 1%, the Frankfurt-based association said.

Demand from eurozone partner countries was particularly weak, with orders from that region falling 21% year-on-year. Orders from non-eurozone countries, by contrast, rose 11%.

Industry in 'wait-and-see mode'

VDMA chief economist Johannes Gernandt cited customer concerns about global crises - and the resulting threat of supply bottlenecks for raw materials - as the reason for the reluctance to order. "As a result, the sector remains without new momentum," he said.

"The German government must not delay for a single day in implementing reforms that provide tangible relief for businesses; our industrial base urgently needs a significant upgrade," Gernandt said.

In the less volatile three-month period from March to May, orders rose both domestically - up 3% - and from abroad, up 13%. The association said March had seen exceptionally strong large-scale orders.