Persistent market uncertainty Italian machine tool orders fall sharply in Q4 as foreign demand weakens

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Italian machine tool orders ended 2025 on a weak note, with a sharp drop in the fourth quarter exposing continued fragility in global demand and only limited relief at home. While annual order intake remained slightly positive, Ucimu warns that geopolitical uncertainty, stalled trade agreements and delayed investment incentives are weighing heavily on the industry’s outlook.

In the fourth quarter of 2025, the Italian machine tool order index recorded a sharp decline, reflecting continued weakness in international demand and only limited support from the domestic market. According to data released by the Economic Studies Department and Business Culture Centre of Ucimu–Sistemi per Produrre, orders fell by 13.6 percent compared with the October–December period of 2024. The index stood at 68 (base year 2021 = 100).

Domestic orders proved more resilient but still slipped by 2.9 percent year on year, reaching an index value of 56.3. The contraction was significantly steeper abroad, where foreign orders dropped by 17.1 percent compared with the same quarter of the previous year, with an index value of 69.3.

Despite the weak fourth quarter, overall order intake for 2025 remained slightly positive thanks to stronger performance earlier in the year. On an annual basis, total orders rose by 3.1 percent compared with 2024 (index 67.6). Domestic orders surged by 38.9 percent (index 55.1), while foreign orders declined by 9.4 percent (index 76.4).

Commenting on the figures, Riccardo Rosa, president of Ucimu, said: “The overall outcome of the order collection regarding 2025 is in line with that of the last two years and thus disappointing once again.”

Referring specifically to the final months of the year, Rosa added: “With particular reference to the last quarter, it seems clear that the business slowdown in foreign markets was not offset by a substantial recovery in the domestic market."

On the Italian market, Rosa pointed to the limits of public incentive schemes: “On the domestic front, the results prove that the 5.0 plan did not work as it should have. Of course, the measure, together with 4.0, partially stimulated demand on the market, but the numerous starts and stops made everything disjointed and not very smooth until its conclusion in December.”

Challenging conditions

Italian machine tool industry ends stagnant 2025, cautious optimism for 2026

Looking ahead, Ucimu is awaiting the implementing decrees for the new investment support measure running through 2028. According to Rosa: “Italian companies have high expectations with regard to this measure, especially due to its duration, which enables users to better plan their purchases. However, we believe it is essential that the decrees are issued very quickly so that we can operate immediately with clarity, supporting demand at a time when the international scenario is putting a strain on the industrial systems of traditional economies.”

Internationally, geopolitical instability continues to weigh heavily on export activity. Rosa cited ongoing conflicts, uncertainty over U.S. trade policy, the crisis in the automotive sector and in Germany, and the closure or inaccessibility of key markets such as Russia and China as major constraints on foreign business.

Against this backdrop, Ucimu welcomed recent developments in India.

“We warmly welcome the recent signing of the free trade agreement between the EU and India,” Rosa said, noting that India is currently Italy’s fourth-largest export market for machine tools, robots and automation, with exports worth 135 million euros in the first nine months of 2025. He also highlighted the revocation of India’s planned “Omnibus Order,” which would have introduced mandatory BIS certification for imported industrial machinery.

By contrast, Rosa criticised the decision to submit the EU–Mercosur agreement to judicial review: “We consider the decision to submit the EU-Mercosur agreement to the Court for assessment a serious blow to the manufacturing industry and, in particular, to the Italian machine tool industry.”

Ucimu has nonetheless stepped up its engagement in Latin America, expanding initiatives in Brazil, Argentina, Chile and Mexico to strengthen industrial cooperation and market access.

“We cannot allow the great potential of companies and the work carried out by organisations such as ours to be nullified by a completely senseless decision,” Rosa concluded. “The competitiveness of the European manufacturing industry is at stake.”

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