The business situation for machinery and equipment manufacturing companies from Germany and Europe continues to show both positive and negative aspects. There are significant regional differences, which is reflected in the results of the latest VDMA Business Climate Survey for Brazil, China, India, and the USA. While the signals in India and Brazil are predominantly positive, the mood in China and the US is more subdued.
“The results of the survey show once again that VDMA members assess the business outlook in the individual countries very differently. India is a ray of hope for them, with stable business development in these challenging times. In Brazil, they are confronted with weakening demand, and in China, their business is slowly emerging from stagnation. In the US, German subsidiaries are struggling with the consequences of trade policy decisions,” said Anke Uhlig, VDMA Economics and Statistics.
India remains the most reliable market among the countries surveyed. Business sentiment among the Indian subsidiaries of VDMA members has remained at a consistently high level since fall 2024, despite high US tariffs and weak demand from Europe.
Business development in Brazil is robust. 34% of companies report a good business situation, while 23% report a poor one. This confirms the overall positive picture painted by the last survey. Nevertheless, local companies are facing complex challenges: a lack of orders is frequently cited as a business obstacle, but financing hurdles are also an issue.
In China, the business climate remains tense but there are signs that it is bottoming out. Some 16% of the companies surveyed rate their situation as good, while 39% rate it as poor. Although capacity utilisation is showing a tentative increase, the level remains low and many companies continue to operate below capacity. “Some member companies are reporting a significant upturn in the current year. At the same time, the majority remains cautious – the picture is mixed and highly dependent on the industry. Enormous competitive pressure remains a key challenge in China,” says Axel Nieslony, VDMA Economics and Statistics. The companies expect nominal sales growth of 6% for 2025, slightly above the VDMA forecast for the entire Chinese machinery and equipment manufacturing sector.
In the USA, the business climate is deteriorating significantly. Only 14% of subsidiaries based in the USA rate their situation as good, while 29% rate it as poor. The outlook is more positive: overall, 42% expect the business situation to improve in the next six months, while 10% expect it to deteriorate. The domestic market is likely to provide support here: 53% of those surveyed expect domestic orders to increase in the next three months, while 35% anticipate growth from abroad. Despite the gloomy environment, 39% of the companies surveyed plan to expand their local workforce in the next six months – the highest figure among the four countries.
The VDMA Business Climate Survey shows that the international sales markets of European machinery and equipment manufacturing companies still drift apart. India and Brazil remain pillars of growth, while VDMA members in China are suffering from competition and those in the US from trade policy pressures.“Global uncertainties and tariffs are challenging German and European machinery and equipment manufacturing. Today, differentiated market strategies and a strong local presence are crucial. Those who remain flexible will still have opportunities in a fragmented global market,” summarised Uhlig.
