HANOVER, Germany, April 23 (Reuters) - German engineering association (VDMA) raised its forecast for 2018 output growth to 5 percent from 3 percent, driven by strong demand from other European countries and the United States, its head said on Monday.
Speaking at the Hannover Messe trade fair, VDMA President Carl Martin Welcker said U.S. President Donald Trump's tax cuts have helped companies invest more in new machinery in German engineers' largest single export market.
"However, the sword of Damocles hangs over us in the current trade conflict, and its effect especially on the engineering sector cannot yet be forecast," he said.
Deliveries to Britain would probably shrink even more than in 2017, when the drop was 3 percent due to concerns about Brexit, he added.
"We do not even rule out a double-digit decline. Brexit will leave a clear mark on investments on the island," Welcker said.
He had told Reuters in an interview earlier this month that VDMA's output forecast for 2018 could be revised upward after a stronger-than-expected 3.9 percent rise in 2017. (Reporting by Tom Kaeckenhoff Writing by Riham Alkousaa Editing by Michael Nienaber)