Machine tool sales are often seen as an indicator of coming demand for precision tooling.

Germany’s output of machine tools, accessories, parts and services rose 2% to an all-time high 14.5 billion Euros last year according to preliminary data, and members of the country’s industry association for the sector expect to top that mark by 4% this year.

"The main support for the machine tool industry came from the domestic market,” according to VDW Chairman Martin Kapp. Speaking at the association’s annual press conference in Frankfurt am Main, Germany, Kapp explained that German demand for machine tools rose 5% last year while exports slid 4%.

Like German precision toolmakers–which also expect 4% growth this year–association officials admitted that strong US car demand helped drive German machine tool production even though exports of such tools to the US fell 9% last year. German carmarkers reported record deliveries in the US earlier this year.

Europe has helped, too. General demand in the region in the fourth quarter of 2013 was better than expected, the association said. This surge "overcompensated” for weakness in other regions in the final three months of last year.

Demand displayed stark differences in growth based on the type of machine tool, the VDW said. Thanks to solid automobile orders, production of forming equipment rose 14% last year and was responsible for 30% of total output, according to preliminary VDW data. Output of milling machines eased 1%, the association said.

However, due to the cyclical nature of the machine tool industry, this year milling technology output is expected to rise 14% while production of forming units will only increase 5%, the association predicted.