First quarter reports show the machine tool builders in Germany and Italy —Europe’s two largest-producing nations — are regaining some stability in their home markets. Domestic sales remain significant bases for the builders, which have relied heavily on exports for revenues in the past two years.

VDW, the German Machine Tool Builders' Association, reported its members Q1 2014 domestic new orders rose 20% over the total for the same period of 2013. New orders for exports rose 5% in the same comparison.

German machine tool manufacturers produced capital goods and services worth about €14.5 billion in 2013, a 2% annual increase. It ranks among the largest manufacturing sectors in the country’s economy.

"The domestic market is a major source of demand for the machine tool sector right now," according to VDW executive director Dr. Wilfried Schäfer.

The group indicated that new orders began to rise at the end of 2012, and that continuing trend “confirms just how optimistic German clients are at the moment, and how the domestic reluctance to invest is now well and truly over,” Schäfer said. “This is also reflected by the sentiment levels in industry which have risen again recently.”

VDW detailed that among its members customers, orders for new machine tools have risen by 14%, with especially strong demand for turning and grinding machines. Forming equipment orders were up 4%.

“No clear increase in demand as yet been noted from foreign customers,” Schäfer said. “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.

"The first quarter has given the green light to increased production in the current year," he continued, though he cautioned that all VDW’s forecasts are based no negative impact from international developments, specifically the risk of escalating hostility involving Russia, the third-largest foreign market for the German machine tool industry.