Recent surveys indicate a persistent lack of incoming orders for a significant portion of German businesses, signaling a continued slowdown in economic recovery. The Ifo Institute’s latest assessment reveals that 36.7 percent of companies report insufficient orders, a figure largely unchanged since April (37.3 percent) and considerably higher than long-term averages.
Klaus Wohlrabe, head of the Ifo surveys, stated that despite marginal improvements, the economy has yet to reach a turning point, with the ongoing order shortage remaining a primary obstacle to substantial growth.
The industrial sector is experiencing a renewed increase in companies reporting order deficits, rising from 36.8 percent to 38.3 percent. The automotive industry is particularly affected, with the proportion of companies facing order shortfalls increasing sharply from 35.4 percent to 42.6 percent. Mechanical engineering (46.1 percent) and manufacturers of electrical equipment (40.6 percent) are also heavily impacted, with nearly half of metalworking companies now reporting insufficient orders.
The service sector shows some signs of easing, with fewer businesses reporting a lack of orders – decreasing from 32.3 percent to 29.9 percent. However, conditions remain strained in specific sub-sectors. Temporary employment agencies, while showing improvement with a decrease from 73.4 percent to 56.3 percent, continue to face considerable challenges. The hospitality industry (54.2 percent) and advertising/market research firms (51.4 percent) also report a high incidence of order shortages.
Conditions in the trade sector remain difficult overall. Wholesale trade reports a significant increase in companies experiencing order shortfalls, now at 66.2 percent compared to 61.7 percent in the previous quarter. The retail sector has also seen no improvement, with the proportion of businesses reporting insufficient demand rising slightly from 50.6 percent to 51.0 percent. This indicates that more than half of retail operations continue to struggle with weak demand.