ZVEI – German electrical and digital industry with a decline in orders at the start of 2024

The German electrical and digital industry started 2024 with a high decline in orders: incoming orders fell short of their corresponding previous year’s value by a total of 10.8 percent in January.

While domestic orders fell by 7.1 percent, orders from foreign customers fell almost twice as much (-13.6%). 9.4 percent fewer new orders were received from the euro area and 16.0 percent fewer from third countries than in January 2023.

The order development for the entire past year 2023 was subsequently corrected slightly upwards by Destatis. Instead of minus 2.2 percent, there is now only minus 1.9 percent. Domestic orders increased by 3.0 percent last year. Foreign orders, on the other hand, fell by 5.9 percent (Eurozone: – 9.3%, non-Eurozone: – 4.0%).

The real production of electrical and electronic goods in Germany, adjusted for price effects, was 5.0% lower in January 2024 than in the same month of the previous year. 

“However, January 2023 was still very strong, so the bar was quite high,” said Dr. Andreas Gontermann, ZVEI chief economist.

Because Destatis has switched its reporting to a new base year – now 2021 – and the weighting scheme has also been adjusted in this context, only stagnation in aggregate industry output is reported for the past year 2023, instead of the previous plus 0.4 percent.

At 17.7 billion euros, the nominal revenues of the German electrical and digital industry in January 2024 were 5.4 percent lower than in the same month of the previous year. Sales of 8.6 billion euros were made with domestic customers (-7.2%) and 9.1 billion euros (-3.7%) with foreign customers.

While revenues with business partners from the Eurozone increased by 2.3 percent to 3.5 billion euros in January, there was a decline in revenues with customers outside the common currency area by 7.1 percent to 5.6 billion euros.

In 2023, aggregated revenues rose by a total of 6.6 percent to a new record of 239.4 billion euros.

Last year, business worth 115.1 billion euros was done domestically (+7.3%) and 124.3 billion euros abroad (+6.1%). The development of sales with partners from the euro area (+5.9% to €44.1 billion) was similar to that with customers from third countries (+6.1% to €80.2 billion).

Finally, the business climate in the German electrical and digital industry continued to recover slightly in February 2024.

“It was the third increase in a row, albeit at a low level,” said Gontermann. 

The assessment of the current situation was somewhat less favorable than in January, but general business expectations increased. Export expectations also advanced for the third time in a row in February.