Status: 04.02.2022 10:47 a.m
German industry unexpectedly landed a large number of orders before the turn of the year. The order books are fuller than they have been for decades. However, the companies cannot process everything as usual.
German industry started the new year with a strong increase in orders. According to the Federal Statistical Office, companies received 2.8 percent more orders last December than in the previous month. The order situation had already recovered in November after previously poor data.
“After a significant decline in October, incoming orders have now recovered twice in a row and are still well above the pre-crisis level,” said the Federal Ministry of Economics. In 2021 as a whole, orders were 9.3 percent higher than in the pre-Corona year 2019 and also increased by 17.8 percent compared to the crisis year 2020.
High domestic demand
“For the industry, the year 2021 was a very satisfactory one – despite all the existing delivery problems with preliminary products and raw materials,” says Thomas Gitzel, Chief Economist at VP Bank. “The order books are well filled and will ensure production well into the current year.”
The increase was mainly driven by high domestic demand: incoming orders from Germany rose by 11.7 percent. According to experts, this shows that companies in this country are preparing for an upswing. Many business representatives are pushing for an end to corona restrictions so as not to stall them. By contrast, orders from the rest of the euro zone fell by 4.2 percent, following a significant increase in the previous month.
Delivery bottlenecks continue to slow down production
According to Commerzbank chief economist Jörg Krämer, the order books in industry are fuller than they have been since the early 1960s, but many companies in Germany are unable to process orders at the usual pace. Because supply bottlenecks and material shortages are still dampening production. “Now it is important that the supply bottlenecks ease in order to enable industrial production to recover,” says Krämer.
However, according to the ifo Institute, the situation is currently easing: Around 67 percent of companies reported problems in the procurement of raw materials and intermediate products in January, after 82 percent in the previous month. It is still far too early to give the all-clear, says Commerzbank economist Ralph Solveen: “Industrial production will remain well below its normal level, at least for long stretches of this year.”