Digital and electrical industry: orders slump in June

Orders for the German electrical and digital industry continued to slump in June. The value of orders is 26.3% below the same month last year, as reported by the German Electrical and Digital Manufacturers' Association (ZVEI). However, there were some large orders in June 2023 that are now distorting the comparison, explained ZVEI economic expert Peter Giehl.

The drop in domestic orders amounted to 26.7 percent, while orders from foreign customers fell by 26 percent , according to the ZVEI. In June, 19.8 percent fewer new orders were received from the eurozone than in the same month last year. Orders from third countries fell by 28.7 percent.

The electrical and digital industry turned over 19 billion euros in June, 12.1 percent less than a year ago. Domestic sales fell by 10.7% to 9.1 billion euros in June, while foreign sales fell by 13.3% to 9.9 billion euros. In the first half of 2024, industry turnover fell by 8.1% year-on-year to EUR 110.4 billion.

Companies complain about lack of orders

The electrical and digital industry is also struggling with lower orders in the longer term: the first half of the year was 14.3% down on the same period last year.

At 54%, the majority of companies surveyed in July are complaining about a lack of orders. Companies cut production by 10 percent in the first half of the year, while turnover fell by 8.1 percent to 110.4 billion euros.

"The business climate in the German electrical and digital industry deteriorated again in July 2024," explained Giehl. "The current situation in particular deteriorated significantly." General business expectations were assessed slightly less favorably than in June.

In contrast, the manufacturing industry recorded an overall increase in orders of 3.9% in June. This was primarily driven by an increase in orders in the automotive industry, while orders for the manufacture of data processing equipment, electronic and optical products declined.

(anw)