Order Shortage in Germany Continues to Worsen
The German economy is being hit increasingly hard by the lack of orders. In October, 41.5% of companies reported a lack of orders, up from 39.4% in July. That’s the highest level since the 2009 financial crisis. “The lack of orders is continuing to hinder economic development in Germany,” says Klaus Wohlrabe, Head of Surveys at ifo. “Hardly any industry has been spared.”
In manufacturing, nearly half of all companies (47.7%) reported a lack of orders. The core sectors, such as mechanical engineering, and the metal and electrical industries, are especially worried. “Although the order backlogs, which rose again in September, may be a sign of hope, there is still a long way to go before the books are full again,” says Wohlrabe.
Among service providers, the share rose slightly from 31.2% to 32.1%. The transport sector in particular is affected by weak industrial activity. Due to the weak demand for labor, around two thirds of recruitment agencies report a lack of orders. “Temporary workers are less in demand in the current situation,” says Wohlrabe. A little over a third of restaurants have too few guests. In the event industry, the share of companies lamenting too few orders is 48.5%, up from 38.5% in July. “The major events have doubtless taken away some of the purchasing power for smaller concerts and events,” says Wohlrabe. Legal and tax consultants as well as auditors are currently less concerned about their order situation. High levels of bureaucracy and regulation mean that they are in high demand for advice.
Source: ifo Institute
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