September 15, 2016

The bayme vbm Business Report, First Half of 2016

The Bavarian metalworking and electrical (M+E) industries have enjoyed a strong second quarter 2016, according to the current business report of bayme vbm – The Bavarian Employers’ Associations for the Metalworking and Electrical Industries.

At the same time, the report also raises concerns over the sustainibility of this positive development.

Rising volume of production and incoming orders

In the second quarter of 2016, Bavaria’s M+E companies reported a rise in production levels of 1.9 percent compared to the previous quarter. Incoming orders also increased by 3.4 percent over the same period – specifically, domestic orders rose by 6.4 percent and orders from abroad improved by 1.9 percent.

However, Bertram Brossardt, CEO of bayme vbm, also pointed out that capacity utilization fell by 0.1 percent to 83.4 points since the first quarter of 2016 – remaining below the average utilization of approximately 85 percent.

Employment growth continues

The number of persons employed by Bavarian M+E companies continued to rise. It currently stands at 816,000 – up by 0.4 percent since the first quarter of 2016 and up by 1.4 percent from last year.

Dampening sentiment

The latest Ifo Business Climate Index shows that the mood in the Bavarian M+E industries has taken a change for the worse in June and July, ending its steady improvement since the beginning of 2016.

In May 2016, the Index for the Bavarian M+E still showed a positive balance of +16.0 points. It has since dropped to +11,3 points in June and to 11,2 points in July. The expectations in particular are falling.

Growing global risks and uncertainties

According to Bertram Brossardt, the weaker outlook reflects growing global challenges such as political instabilities and economic uncertainty, both of which are having a negative effect on economic activity. You can download the current business report for the Bavarian M+E industries at the following link (in German).


Volker Leinweber

Volkswirtschaftliche Grundsatzfragen

Volker Leinweber