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German companies are sitting on a mountain of orders

2021-08-18T10:07:09.555Z


The order backlog in German industry is higher than ever. Also because there is a lack of material to process orders. This could then be followed by strong growth in winter.


Enlarge image

Production at Volkswagen in Wolfsburg

Photo: Swen Pfoertner / REUTERS

Bottlenecks in supply chains and high demand at the same time have given German companies such a thick order cushion as never before.

The order backlog in June grew by 2.8 percent compared to the previous month, according to the Federal Statistical Office.

It has risen continuously since June 2020 and has now reached "its highest level since the statistics were introduced in January 2015".

Open orders from within Germany increased by 4.0 percent and those from abroad by 2.2 percent.

Compared to February 2020 - the month before the start of the Corona restrictions in Germany - the stock is now 17.0 percent higher, seasonally and calendar adjusted.

Economists expect an effect in winter

"In the short term, the thick order backlog shows that the industry can produce less than it would like because of a lack of semiconductors and other problems in the supply chains," said Berenberg Bank's chief economist, Holger Schmieding.

“She can't process many jobs yet.

That slows the pace of the upswing. "

In the long term, however, it is good for the economy. As soon as missing parts are available, production will increase rapidly. »The bottlenecks in the supply chains are shifting production into the future. The cars and machines that customers have already ordered will be produced and delivered later, ”said Schmieding. For this reason, the economy could gain momentum in winter.

Demand has recovered since the end of the first corona lockdown, but according to an Ifo survey, almost two thirds of industrial companies are now complaining about material bottlenecks.

As a result, production started more slowly than was actually possible, which increased order backlogs.

As in the previous month, their coverage in June was 7.0 months.

This number indicates how long the companies would theoretically have to produce in order to meet the existing demand, assuming sales remained the same without new orders.

German industry is on the upswing this year.

One reason for this is the increasing international business.

With the USA and China, the most important export customers of German companies are facing a strong recovery this year, which is why there is increasing demand for products "Made in Germany".

The order backlog for manufacturers of intermediate goods rose by 0.9 percent in June, for manufacturers of capital goods such as vehicles and machines by 3.2 percent and in the consumer goods industry by 4.2 percent.

mmq / Reuters

Source: spiegel

All business articles on 2021-08-18

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