Recent data indicates that a significant portion of German companies continue to report a lack of incoming orders, hindering a substantial economic recovery. The Ifo Institute’s July survey reveals that 36.7% of companies are experiencing insufficient orders, a figure largely unchanged from April’s 37.3% and remaining considerably above long-term averages.
According to Klaus Wohlrabe, head of the Ifo surveys, despite some incremental progress, the economy has not yet reached a turning point and the persistent shortage of orders remains a key obstacle to robust growth.
Within the industrial sector, reported order deficits have increased, climbing from 36.8% to 38.3%. The automotive industry is particularly affected, with the proportion of companies reporting insufficient orders rising substantially from 35.4% to 42.6%. Mechanical engineering and manufacturers of electrical equipment are also significantly impacted, reporting deficits of 46.1% and 40.6% respectively. Nearly half of businesses in the metal industry now indicate inadequate order books.
The service sector, however, shows some signs of easing, with fewer companies reporting a lack of orders – decreasing from 32.3% to 29.9%. Yet, certain segments remain under pressure, notably temporary staffing agencies, though the proportion reporting deficits has fallen from 73.4% to 56.3%. The hospitality industry (54.2%) and advertising/market research firms (51.4%) also continue to report high levels of insufficient order volume.
The situation in trade remains challenging overall. Within wholesale trade, approximately two-thirds of companies (66.2%) now report a lack of orders, a marked increase from the previous quarter (61.7%). Retail trade has also seen no improvement, with the proportion of companies reporting insufficient demand rising slightly from 50.6% to 51.0%, meaning that half of all businesses report inadequate order volumes.
