Lack of Orders Weighs on the German Economy

The lack of orders in manufacturing is increasingly becoming a burden on the German economy. In January, 36.9% of manufacturing companies reported a lack of orders, up from 36.0% in October. A year ago, the proportion was just 20.9%. In the service sector, the proportion rose from 29.3% to 32.1%. “The lack of orders has worsened noticeably over the past year. Hardly an industry has been spared,” says Klaus Wohlrabe, Head of Surveys at ifo. “What’s more, order backlogs are shrinking.”

In manufacturing, complaints of a lack of orders are loudest in energy-intensive industries. In the paper industry, the proportion is 53.9%, in basic metals manufacturing it is 53.3%, and in the chemical industry it is still 40.6%. Companies in the food industry are less affected (14.9%).

Among service providers, it is primarily recruitment agencies (54.6%) that are receiving fewer orders due to the difficult economic situation. In hospitality, 38.6% of businesses report a lack of guests. Even among IT service providers, the situation could be better. Around one-third of the companies surveyed reported that they still had the capacity to take on additional orders. The consulting industry is relatively free of demand concerns (6.8%).