Germany's VDMA engineering association on Monday again lowered its forecast for machinery production growth in 2022, citing the conflict in Ukraine, global supply chain difficulties and the impact of the coronavirus pandemic.
VDMA said it now expected production of "Made in Germany" industrial machinery to rise 1 per cent in 2022, after cutting its forecast to 4 per cent from 7 per cent two months ago. Last year, production increased by 6.4%.
"Russia has traditionally been an export market for engineering companies because of its relatively low investment in local production. However, losing this market can be very painful for individual companies, "Karl Haeusgen, VDMA president, said in a statement.
He added that before the outbreak of the conflict, 80 percent of companies considered their business prospects in Russia to be good or satisfactory. Now, 75 percent expect the economy to worsen in the next six months or want to give up altogether.
"It shows how much the war has changed everything," Hausgen said.
Last year, Germany exported 26.6 billion euros worth of goods to Russia, much of it machinery.