German industry records a sharp decline in orders - financial experts express concern

German industry records a sharp decline in orders - financial experts express concern

According to a report from www.tagesschau.de,

German industry experienced a significant decline in orders in September, particularly in export business with China. According to the Federal Statistical Office, the order backlog fell by 5.4 percent compared to the same month last year, which represents the sharpest decline since statistics began in 2015. There was also a decline of 0.8 percent compared to the previous month, which is the third decline in a row. DekaBank economist Andreas Scheuerle sees this decline in stocks of foreign orders and capital goods producers as a result of the world's restrictive monetary policy and the high level of political uncertainty.

Order backlogs have fallen drastically, particularly in the automotive industry and mechanical engineering. In the automotive industry, the order backlog fell by 2.9 percent and in mechanical engineering by 2.7 percent. Although order backlogs are still at a high level in both industries, the range of the order backlog (the number of months in which companies could produce without new orders while sales remain the same) is falling to its lowest level in more than two years.

The declining production in the export-heavy industry in the last three of the past four months is largely due to the weak global economy and weak export business, especially with China. In addition, many central banks have raised their key interest rates in the fight against inflation, which increases financing costs and dampens demand for German goods.

These developments suggest that German industry is facing major challenges as order backlogs fall dramatically and global demand for German goods declines. This could lead to a further reduction in production and a decline in economic output in the short to medium term. German financial markets could also be affected by weaker industry as demand for German exports declines and financing costs rise.

Given these developments, it is important to keep a close eye on economic indicators and consider possible measures to stimulate export-oriented industries.