The drop in orders is primarily due to significantly fewer orders from abroad.
(Photo: obs)
Berlin In the first month after the outbreak of war in Ukraine, German industry suffered an unexpectedly sharp drop in orders. The companies collected 4.7 percent fewer orders in March than in the previous month, as the Federal Statistical Office announced on Thursday.
This is the sharpest slump since October 2021. Experts surveyed by Reuters had only expected a drop of 1.1 percent. Orders had already shrunk in February, albeit far less sharply at minus 0.8 percent.
“In the first month of the Russian war of aggression in Ukraine, there is already a clear effect of the increased uncertainty on demand,” commented the Federal Ministry of Economics on the development in March. A quick improvement is not expected. “The outlook for the next few months is currently muted,” said department head Robert Habeck in view of the ongoing war.
The decline is primarily due to significantly fewer foreign orders: their volume was 6.7 percent lower than in February. New business outside the euro zone fell by 13.2 percent, while that from the monetary union grew by 5.6 percent.
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Domestic orders fell by 1.8 percent. In particular, capital goods such as machines, vehicles and systems were less in demand because corporate customers are currently reluctant to spend more: Here, demand collapsed by a total of 8.3 percent.
Many industrial companies are currently reporting bottlenecks, some of which worsened after the Russian invasion of Ukraine on February 24: In April, three out of four companies complained about bottlenecks and problems with the procurement of preliminary products and raw materials, as the Ifo Institute reports found out from his company survey.
The economy is also struggling with the corona crisis in its most important trading partner China, which has sent the financial metropolis of Shanghai into a week-long lockdown.
More: Read the current developments in the Ukraine war in the live blog