ZVEI – Electrical and digital industries: Slight increase in incoming orders again

In August 2023, incoming orders in the German electrical and digital industry rose by 2.4 percent compared to the previous year.

“This means that orders have recently increased again after the decline in July. This was primarily due to domestic orders, which increased by 13.6 percent – ​​also, but not only – thanks to large orders,” said ZVEI chief economist Dr. Andreas Gontermann. 

In contrast, orders from abroad continued to decline: they were 5.8 percent below their previous year’s level in August. While customers from the Eurozone reduced their orders by 19.0 percent, those from third countries were higher than a year ago (+ 1.8%).

In the entire period from January to August 2023, incoming orders were only slightly below the corresponding previous year’s level (-0.1%). Domestic orders increased by 7.0 percent, whereas orders from foreign business partners were 5.7 percent lower than in 2022 (Eurozone: – 10.2%, third countries: – 3.1%).

The price-adjusted output of electrical and electronic goods in Germany rose slightly by 0.7 percent in August 2023 compared to the previous year. 

“Production activity is still drawing on the order backlog, which remains high compared to long-term standards,” says Gontermann. “However, these stocks are continually being reduced.”

In the entire first eight months of this year, industry output was 3.4 percent above the corresponding level from 2022.

Nominal sales in the German electrical and digital industry advanced by 8.0 percent in August 2023 compared to the previous year to 20.6 billion euros. Domestic revenue increased by 6.4 percent to 9.6 billion euros. The increase in foreign sales was 9.5 percent (€11.0 billion). Revenues with business partners from the euro area grew by 6.6 percent to 3.5 billion euros. Sales with third countries increased almost twice as much (+ 10.7% to €7.5 billion).

Cumulatively from January to August 2023, aggregate industry revenues came to 159.9 billion euros, exceeding the corresponding previous year’s value by 12.0 percent. 

“In view of a smaller increase of seven percent in the corresponding producer price index in the same period, this also represents a significant real plus,” said Gontermann. 

Business with domestic customers increased by 13.4 percent to 76.7 billion euros in the first eight months, while sales with foreign partners increased by 10.9 percent to 83.2 billion (Eurozone: + 9.9% €29.5 billion, third countries: + 11.4% to €53.7 billion).

At 908,000, the number of employees in the domestic electrical and digital industry was recently 2.7 percent higher than a year ago.

The business climate in the German electrical and digital industry fell for the sixth month in a row in September. Both the current situation and general business expectations were assessed less favorably than in the previous month. Export expectations also fell in September.