On average, German industrial companies now need eight months to process all existing orders. This is a record. However, this is also due to the fact that many companies continue to have great difficulties in fulfilling orders.
German industrial companies have bulging order books like never before – and this despite the crisis and the looming recession. However, this was less due to new orders than to the increasing duration of processing. According to the Federal Statistical Office, the number of orders in August rose by 0.3 percent compared to the previous month. Compared to the previous year, there was an increase of 11.1 percent. A few days ago, the authority announced that incoming orders in August were 2.4 percent lower than in July. However, experts had pointed out that without taking into account the fluctuating large orders, there had been a small plus.
“The manufacturing industry has recorded a new high in open orders every month since February 2022,” as the Federal Office explained in relation to the statistics that have been kept since 2015. One reason for the ever-growing backlog of orders is also given: “In addition to high energy costs for industrial companies, the ongoing shortage of primary products continues to cause problems when processing orders”.
Economists speak of a comfortable cushion. “But it’s not a soft pillow for a carefree sleep,” said DekaBank economist Andreas Scheuerle. The range of the order backlog in the intermediate goods sectors is moving away from its all-time high – particularly strongly in energy-intensive sectors. “A thick backlog of orders is of no use if it becomes too expensive to process the orders,” said Scheuerle.
Open orders from Germany increased in August by 0.1 percent compared to the previous month, those from abroad by 0.5 percent. The stock of manufacturers of capital goods such as machines, systems and vehicles increased by 0.3 percent, and among consumer goods producers by as much as 1.8 percent. In contrast, it shrank by 0.1 percent among manufacturers of intermediate goods.
According to the information, the range of the order backlog stagnated at eight months. It indicates how many months the companies would theoretically have to produce with unchanged sales without new incoming orders in order to process the existing orders. For manufacturers of capital goods, the range is above average at 11.8 months.
The delivery bottlenecks in German industry have recently increased again. In September, 65.8 percent of the companies surveyed reported material shortages, after 62.0 percent in August, as the Munich IFO Institute found out in its monthly survey. “Unfortunately, the hoped-for sustainable relaxation did not materialize,” said Klaus Wohlrabe, head of the surveys. “There is therefore no support for the economy during the recession for the time being.”
