German engineers warn of uncertain outlook for exports to US, China

An employee welds the shell frame of a train car at the Siemens Industry manufacturing facility in Sacramento, California.
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German engineers expect muted growth in 2017, with an uncertain outlook for business in the United States and China offsetting a recovery in exports to some markets such as Russia and India, industry body VDMA said on Tuesday.

"A broad-based economic recovery would look different, and no real impulses for growth are in sight," VDMA President Carl Martin Welcker said, affirming a forecast for 1 percent sector output growth in 2017 after a flat 2016.

Welcker warned it was unclear what path the United States, German engineers' biggest export market, would take after Donald Trump replaces Barack Obama as president in January.

"The designated President's comments don't make us optimistic," he said.

Workers snap a chalk line onto a wind turbine blade during production at the Siemens AG turbine blade plant in Fort Madison, Iowa.
Timothy Fadek | Bloomberg | Getty Images

In China, meanwhile, there are still numerous risks such as overcapacity and high debt levels, the VDMA said, adding it could not rule out a continued decline in exports to the world's second-biggest economy.

In the first nine months of 2016, the value of exports to the United States eased by 2.4 percent to 12.2 billion euros ($12.9 billion), while those to China dropped 11.5 percent to 10.6 billion.

Exports to Russia could return to slight growth in 2017, after a 7.3 percent slide in the first nine months of 2016, the VDMA said, adding demand from Brazil could bottom out next year and that from India could recover.

The VDMA, which represents large engineering companies such as Siemens as well as thousands of medium-sized industrial goods makers, sees sector sales edging up to 224 billion euros in 2017 from 220 billion this year.