Status: 08/17/2022 11:21 a.m
Order books in German industry are fuller than they have ever been since records began in 2015. Companies will need many more months to fully process the orders.
Orders in German industry continue to pile up. In June, the stock of orders increased by 0.5 percent compared to the previous month. Compared to the previous year, it has even grown by 14.1 percent, as the Federal Statistical Office announced today.
“This means that the order backlog in the manufacturing sector has reached a new high since records began in 2015,” said the Wiesbaden statisticians.
Delivery bottlenecks for preliminary products
The reason for this is the shortage of primary products that existed in Ukraine even before the Russian war. The tough corona lockdowns of Germany’s most important trading partner China have made the situation even worse.
Because of the disrupted supply chains, many companies are still having problems processing their orders. Open orders from Germany increased by two percent compared to the previous month, while those from abroad fell by 0.3 percent.
Traffic jam at machine builders particularly large
The so-called reach of the order backlog fell slightly to eight months in June, after having been 8.1 months in May. The range indicates how many months the companies would theoretically have to produce with constant sales without new incoming orders in order to process the existing orders. At 11.8 months, it is particularly high for manufacturers of capital goods such as machines and vehicles.
If the delivery bottlenecks resolve in the coming months, this could stimulate production in German industry. However, the procurement of raw materials and preliminary products is likely to be a major problem for them in the second half of the year.
shipping problems
In July, 73.3 percent of the companies surveyed complained about bottlenecks, as the Munich ifo Institute found out in its monthly survey. “In addition to the fundamental shortage of electronic components, problems in global logistics, especially in shipping, continue to contribute to the procurement problems,” said Klaus Wohlrabe, head of the ifo surveys.
The Association of German Chambers of Industry and Commerce (DIHK) expects difficult months due to bottlenecks and the problematic procurement of raw materials. “The ongoing supply chain disruptions make it difficult for many companies to process their orders,” said DIHK economic expert Jupp Zenzen.