(Bloomberg) -- Germany’s machine makers painted a bleak picture for 2020, saying output won’t grow before the second half of the year at the earliest.
Even then, production is set to fall 2% after a decline of a similar scale this year, according to the Mechanical Engineering Industry Association, or VDMA. It said any rebound will depend on improving business confidence and no further aggravation in the trade war between the U.S. and China.
“It’s too early to sound the all-clear because global economic developments are still strained by a high degree of uncertainty,” VDMA President Carl Martin Welcker said in a statement. “Our industry isn’t in a crisis but many of our customers are rattled and postpone or stop their investments.”
The ongoing weakness, reflecting weaker global demand, threats of trade sanctions and upheaval in the auto industry, pushed Germany’s economy close to recession this year. Output in the machine industry was down 1.8% through October, with orders slumping 9%, the VDMA figures show.
The fourth quarter has got off to a weak start, with orders and industrial production both unexpectedly dropping in October. The Bundesbank predicts no growth at all in the final three months of the year, and only a modest recovery next year.