The backlog of unfulfilled orders in German industry rose by 0.5% in August compared to July, preliminary data from the Federal Statistical Office Destatis show. On an annual basis, the growth is 10.7%, and the available orders provide companies with work for about 9.0 months with unchanged turnover and no new orders.
The increase comes from both the domestic and foreign markets. Unfulfilled orders from German customers increased by 0.4%, and those from abroad – by 0.5%.
Mechanical engineering and electronics support growth
Among the main industries, the most significant contribution was made by the production of computer, electronic and optical equipment, where the portfolio grew by 1.4%, and mechanical engineering - by 0.5%. An increase of 0.3% was recorded in the production of aircraft, ships, trains and military equipment.
However, the development is not uniform. In the automotive industry, unfulfilled orders decreased by 0.4%. A growth of 0.2% was registered in the manufacturers of investment goods, and 1.1% in intermediate goods. Consumer goods orders fell by 0.1%.
The backlog reached a record high in July, rising 1.5% month-on-month and 10.9% year-on-year. At the same time, the period for which companies have jobs also reached 9.0 months – the highest level since the statistics began in 2015.
New orders fell sharply in August
The positive picture in the backlog coincides with a significant decline in new orders. According to Destatis, new industrial orders fell by 10.6% in August compared to July. Almost all of the decline was due to the other transport machinery sector, which includes aircraft, shipbuilding, train production and military equipment.
This sector reported unusually large deals in July, which raised the comparison base. Excluding large orders, the decline in August was only 0.1%. In the three-month period from June to August, new orders were 1.3% above the level of the previous three months, but excluding large deals they were 2.6% lower.
“The order backlog continues to give reason for joy“, said Alexander Krueger, chief economist at Bankhaus Bethmann, quoted by Reuters. According to him, the key question is whether companies will be able to convert the large volume of orders into actual production.
Sources: reuters.com, tagesschau.de, klamm.de