Business outlook mixed: VDMA

According to Germany’s VDMA, the global business situation for machinery and equipment manufacturing companies from Europe remains mixed. The VDMA is the association for Germany’s construction machinery manufacturers and makes regular surveys of the international market conditions.

The VDMA’s Business Climate Survey for Brazil, China, India and the USA, is based on surveys of local member companies. This shows that while India and Brazil show stable to positive figures, China is struggling with structural challenges. The market in the USA also shows a cautious development, not least due to the latest customs policy.

"The current results confirm once again that machinery and equipment manufacturing is a globally active industry with very different local structures. Our companies are navigating through regional uncertainties, geopolitical hurdles and economic fluctuations – with India as a clear bright spot," said Dr Johannes Gernandt, chief economist of the VDMA.

India remains a fast-growing market for the machinery and equipment manufacturing industry. Of the companies surveyed, 27% rate their business situation as good, 64% as satisfactory and only 9% as poor. The responses on the order backlog indicate that the Indian domestic market in particular is responsible for the positive business climate. 

The outlook for the future is even more positive: 62% of companies expect the business situation to improve further in the coming months while only 2% expect it to deteriorate. For 2025/26, companies expect nominal turnover growth of 9%. 

Of those surveyed, 54% already manufacture in India and 74% of which intend to further expand their capacities. Of the 46% without their own local production facilities in India, 21% are aiming to do so.

The Brazilian market is also proving resilient for machinery and equipment manufacturing, with 31% of respondents reporting a good business situation and 61% a satisfactory one. In 2024, considerable turnover growth of 13% was achieved, more than originally expected. For 2025, the companies expect growth of 7%. 

Nevertheless, uncertainties are increasing: The proportion of companies reporting business obstacles has risen. Weakening domestic demand, financing hurdles and an increasingly challenging competitive environment are mentioned frequently.

The business climate in China remains tense. Although the situation has improved slightly, 36% of companies continue to report a poor business situation. By contrast, only 14% are positive. Nevertheless, companies expect turnover growth of 5% in 2025, following stagnation in the previous year.

The key challenges in China continue: a persistent lack of orders, increasing competition from local suppliers and trade barriers such as customs duties. Capacity utilisation and the order backlog remain at a low level, particularly in domestic business.

The USA was surveyed for the first time, revealing a market with great uncertainty. Just 20% of companies report a good business situation and 59% a satisfactory one, but 21% report a poor one.

Particularly alarming is that 79% of companies feel that their business activities in the US are being impaired. The main reasons for this are a lack of orders and the recently introduced tariffs on European machinery and equipment products. These are also reflected in expectations, with only 30% expecting the business situation to improve and just as many expect it to deteriorate. An increase in turnover of just 2% is the forecast for 2025.

The VDMA Business Climate Survey emphasises the heterogeneity of international markets. While India is developing into a reliable growth market, clear strategies for dealing with political and structural challenges are needed in China and the USA.

"For our member companies, this means that differentiated market strategies, robust local networks and staying power are more important today than ever before. Those who focus on the right markets and remain flexible can succeed even in a complex global environment," commented Dr Gernandt.

The VDMA Business Climate Survey was conducted between 14 April and 2 May 2025. More than 400 subsidiaries of German machinery and equipment manufacturing companies in the individual countries took part. Thanks to a standardised methodology and country-specific additional questions, the survey enables a structured comparison between Brazil, China, India and the USA. The survey takes place every six months and provides important indicators for market observation and strategic planning in the international machinery and equipment manufacturing industry.