German Manufacturers Plan Slightly Smaller Production Increases
German manufacturers’ production expectations have fallen somewhat, but are still at a high level. The indicator fell to 27 points in May, after standing at 32 points in April. This is a finding from the most recent ifo Business Survey. “When it comes to production expectations, the picture is very different across different industries,” says ifo expert Klaus Wohlrabe. “The automotive industry and its suppliers are significantly scaling back their expectations, but continue to anticipate production increases,” Wohlrabe adds. Clothing manufacturers, meanwhile, reported plans to expand production for the first time in nine months.
In the automotive industry, the indicator dropped to 10 points in May from 42 points in April. A contributing factor is the problem of chip availability. In the chemical industry, the indicator fell to 21 points from 27 points in April. In the electrical and electronics industries, despite a slight decline from 42 points to 40 points, significant production increases continue to be announced.
In the clothing industry, the survey score jumped to plus 20 points in May from minus 15 points in April. Furniture manufacturers expect pent-up demand to continue driving sales; their survey score rose from 21 points to 36 points in May. For now, the sharp rise in the price of wood does not seem to be having any effect. Manufacturers of machinery and equipment will also see their healthy order situation reflected in their production figures; the survey score here rose to 43 points from 40 points in April.
Figures above zero express expected growth, figures below zero express shrinking production.
The German Federal Statistical Office will announce its April figures for industrial production today, Tuesday.
