Expectations in German Mechanical Engineering Worsen Again
Business expectations for the next six months have fallen among manufacturers of machinery and equipment in Germany. The indicator plummeted to minus 23.3 points in June, down from minus 17.9 points in May, finds the ifo Institute’s survey. “The slump in expectations is likely due to ongoing material shortages and uncertainty about overall economic developments in light of Russia’s attack on Ukraine,” says Nicolas Bunde, an industry expert at the ifo Institute.
More than 90 percent of manufacturers of machinery and equipment reported a shortage of intermediate products. The shortage of skilled workers is again a growing problem, according to 39 percent of the companies surveyed. Manufacturers of machinery and equipment assess their current business situation as slightly worse, but still positive; the indicator fell to plus 39.9 points, down from plus 40.5 points in May. The order backlog stands at 6.5 months, meaning order books are fuller than ever. “This is the result of supply chain disruptions that are preventing orders from being processed quickly,” Bunde says. Companies want to take stronger action to expand their production again. The indicator remained constant at 20.3 points. In April, the figure was 15.5 points.
The points are net percentage points on a scale of plus 100 to minus 100. If all companies are in a positive mood, it is plus 100. If 90 percent are positive and 10 percent negative, it is plus 80. Neutral responses are not considered.
