Incoming orders rose by 1.9 percent in May compared to April, the Federal Statistical Office reported. Year-on-year, the increase was 6.2 percent. Many companies benefited from large foreign orders, especially from the eurozone. Domestic orders rose by only 1.3 percent.
The largest contribution to the increase came from vehicle construction – including aircraft, ships, trains and military vehicles. Mechanical engineering and the electrical industry also grew, while the automotive industry booked fewer orders. The Federal Ministry of Economics said: “After the outbreak of the conflict in the Middle East, there were initially pull-forward effects on the demand side, followed by an expected rebound. Now the previous upward trend seems to be resuming.”
The German Chamber of Commerce and Industry (DIHK) expressed cautious optimism. DIHK economic expert Jupp Zenzen said the increase gives hope that industry has coped better with the consequences of the Middle East conflict than feared. ING analyst Carsten Brzeski struck a similar note. Order intake is recovering only gradually, he said. “Despite initial fears that the conflict in the Middle East could trigger new disruptions in supply chains, German industry seems to have gotten off with little more than a black eye.” However, many economists do not expect a strong recovery. Commerzbank chief economist Jörg Krämer: “On the one hand, the Iran conflict remains a source of uncertainty. On the other hand, German companies continue to suffer from an erosion of location quality.” Jens-Oliver Niklasch of Landesbank Baden-Württemberg (LBBW) noted: “The shortage of skilled workers is a real challenge.”
Source: Tagesschau
