Orders in German industry are on the decline. According to economists, the German economy must prepare for difficult times.
In March, German industry clearly felt the uncertainty of customers caused by the Ukraine war. Orders fell by 4.7 percent compared to the previous month, as the Federal Statistical Office announced on Thursday based on preliminary data.
“Great uncertainty due to the war in Ukraine, rising energy and raw material prices and a slowdown in the global economy are leading to reluctance to place orders,” explained Jupp Zenzen, economic expert at the Association of German Chambers of Industry and Commerce (DIHK). In addition, there are acute supply chain problems due to the corona lockdowns in China. Above all, manufacturers of capital goods such as machines or technical systems clearly felt the reluctance to place orders. Incoming orders fell by 8.3 percent compared to the previous month. The consumer goods sector, on the other hand, recorded an increase of 6.4 percent.
Business in countries outside the euro area was particularly bad at minus 13.2 percent. On the other hand, orders from the common currency area rose by 5.6 percent compared to the previous month. Overall, the volume of foreign orders fell by 6.7 percent. Domestic orders fell by 1.8 percent.
The drop in total orders was more pronounced than experts had expected, who had expected an average month-on-month drop of 1.1 percent. Compared to March 2021, the order intake was 3.1 percent lower after calendar adjustments.
Delivery bottlenecks and material shortages
According to the latest data, incoming orders in the manufacturing sector fell by 0.8 percent month-on-month in February. The order books of many companies have been well filled so far. However, due to delivery bottlenecks and a lack of materials, orders often cannot be processed at the usual pace.
According to Commerzbank economics expert Marco Wagner, given the order backlog, companies do not currently have to worry about the recently weaker orders. “But the influx of new orders should gradually ebb.”
Thomas Gitzel, chief economist at VP Bank, expects that the summer months will “probably be a dry spell for the German economy.” The burdens are currently great in view of the Ukraine war, high inflation rates and supply chain problems.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
