Orders received by the German machine tool industry in the first quarter of 2014 were 10% up on the previous year. Domestic orders were 20% higher than last year, whereas orders from abroad increased by 5%.

"The domestic market is a major source of demand for the machine tool sector right now," said Dr Wilfried Schäfer, Executive Director of the VDW (German Machine Tool Builders' Association) in Frankfurt am Main, commenting on the result.

The machining equipment sector, with its broad client base, has moved ahead to take the leading position, in contrast to last year. Orders have risen here by 14%. There was demand for a wide range of technology, especially turning and grinding machines plus machining centers.

Forming equipment orders, by contrast, were 4% up on the previous year. Many orders were received in particular for sheet metalworking machines designed for a wide range of applications. Following last year's boom, the demand for pressing equipment has declined slightly.

No clear increase in demand as yet been noted from foreign customers. Orders from the euro zone in particular were down by 10%. "We are pinning our hopes on Asia and America," explained Schäfer. The 9% increase seen in orders from outside the euro zone in the first quarter, by contrast, was much stronger.

All in all, the growth in production is quite healthy, he said. "The first quarter has given the green light to increased production in the current year," confirmed the VDW Executive Director.

All assumptions, however, are based on there being no negative impact from international developments. If the conflict with Russia continues to escalate, this could carry a major risk for both sides. Russia is the third largest foreign market for the German machine tool industry and Germany is the biggest supplier to Russian industry. "The situation is already creating uncertainty in the financial markets," said Schäfer. And this could spread very quickly to the real economy.