“Hardly any industry was spared”
A lack of orders is becoming an economic downturn
February 5, 2024, 8:58 a.m
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Too few orders are increasingly becoming a problem for the German economy. According to the monthly survey by the IFO Institute, almost 37 percent of industrial companies have poor new business. Only one industry is relatively free from demand concerns.
According to the IFO Institute, the lack of orders in industry is increasingly putting a strain on the German economy. In January, 36.9 percent of industrial companies reported a lack of orders, as the Munich researchers announced in their monthly survey.
For comparison: a year earlier the proportion was only 20.9 percent. Among service providers, almost every third company now complains about poor new business. “The lack of orders has noticeably worsened in the last year. Hardly any industry has been spared,” said the head of the IFO surveys, Klaus Wohlrabe. “In addition, the order backlog is melting.”
Within the industry, energy-intensive sectors in particular are complaining about a lack of orders. In the paper industry the share is 53.9 percent and in metal production and processing it is 53.3 percent. In the chemical industry it is still 40.6 percent. Companies in the food industry are less affected (14.9 percent).
Only the consulting industry is relatively free from demand concerns
Among service providers, it is particularly staffing agencies (54.6 percent) that are receiving fewer orders due to the more difficult economic situation. In the catering industry, 38.6 percent complain about a lack of guests. “Even among IT service providers there is still room for improvement,” emphasized the IFO Institute. Around a third of the companies surveyed reported that they could still process additional orders.
The consulting industry appears to be relatively free of concerns about demand (6.8 percent). The German economy shrank by 0.3 percent last year because it was hit by high inflation, increased interest rates and the weak global economy. At best, slight growth is expected for the current year. Some economists now believe that Europe’s largest economy will shrink again.