Shortage of orders is falling: German economy is showing initial signs of recovery!

Shortage of orders is falling: German economy is showing initial signs of recovery!

The economic situation in Germany is showing signs of slight improvement, particularly in terms of the order situation. Current reports from South German newspaper According to this, the lack of orders in the German economy has decreased. In April 2023, only 37.3 percent of companies complained about a lack of orders, while in January it was 40.2 percent. This is a decline that has been evident since the beginning of the year.

In the industrial sector, the proportion of companies reporting that they are suffering from a lack of orders fell from 44.8 to 36.8 percent. The situation has eased, particularly in the automotive and chemical industries. However, there is still a high proportion of companies in mechanical engineering, around 43 percent, that suffer from a lack of orders. The food industry and beverage manufacturers are also reporting an increase in the lack of orders, albeit at a low level.

Development and challenges

The daily news adds that in October 2024 the complaint rate about missing orders was at its highest level in 15 years, with 41.5 percent of companies reporting a lack of orders. There is great uncertainty, particularly in the industrial and service sectors. Almost every second industrial company is currently reporting a lack of orders, which is significantly hampering economic development.

Klaus Wohlrabe, head of Ifo surveys, warns of the possibility of an unsustainable recovery. The situation is particularly worrying in core sectors such as mechanical engineering and the electrical industry, while order backlogs have increased but there is still a long way to go until normality. The situation in the service sector has also deteriorated slightly, with the lack of orders increasing to 32.2 percent.

Industries at a glance

Another critical point can be seen in personnel agencies and in the transport sector, where the demand for temporary work has fallen significantly. Around two thirds of recruitment agencies report a lack of orders. In the catering sector, more than a third of companies complain about too few guests, while in the events industry 48.5 percent of companies struggle with insufficient orders. Major events such as concerts also drain purchasing power, which makes the situation even worse.

In summary, although the slight improvement in the order situation is showing initial positive signs, the fundamental challenges and uncertainties in the German economy remain. The upcoming economic forecasts, including those from the spring report by “Wirtschaftsweise”, could provide additional insights and assessments.