In the second quarter of 2011, order bookings in the German machine tool industry rose by 83 percent year on year, according to the German Machine Tool Builders' Association (VDW). Given the dominance of the German industry in the mechanical engineering sector, data released by the VDW are seen as a barometer for general business conditions in the EU.

Domestic demand in Germany in the second quarter this year increased 72 percent while export orders rose by 88 percent, both compared to Q2 2010. Meanwhile, in the first six months of 2011, overall demand increased 103 percent over the figure for the same period of the previous year. In H1, orders from domestic customers increased by 96 percent, while orders from foreign customers rose 107 percent, both year on year.

"The continuingly buoyant level of demand has ensured a magnificent mid-year result", confirmed Gerhard Hein, head of economics and statistics at the VDW. "The growth rates are referenced to an already strengthened baseline from the preceding year," he added.

The sustained boom in order bookings is also ensuring a high level of capacity utilization, which most recently in July of this year was at 94.7 percent in comparison to 76.3 percent a year ago. The order backlog, at 9.7 months, is at its highest for several years. This is even higher at some manufacturers of customized machinery, who are receiving massive orders from the very vigorously expanding automotive industry.