ZVEI – Decline in orders in the German electrical and digital industries is slowing

Production and sales recently increased

At minus 4.7 percent, the German electrical and digital industry recorded a much more moderate decline in incoming orders in April 2024 than in the first quarter of this year (- 13.2%). While domestic orders fell by 13.8 percent, orders from foreign customers increased by 4.0 percent in April. 2.0 percent more new orders were received from the euro area and 5.3 percent more from third countries than a year earlier.

In the first four months of this year taken together, orders were still 11.3 percent lower than in the previous year. Here, domestic orders fell by 14.5 percent. The value of foreign orders was 8.6 percent lower than in the same period last year (euro area: – 7.6%, non-euro area: – 9.2%).

Real production of electrical and electronic goods in Germany, i.e. adjusted for price effects, increased again by 3.0 percent in April 2024 compared to the previous year. 

“One factor that certainly contributed to this was that April this year had a full three more working days than in the same month last year, after it was exactly the opposite in March,” said ZVEI chief economist Dr. Andreas Gontermann. 

In the first four months of this year, aggregated industry output fell short of its previous year’s level by 8.0 percent.

At 18.7 billion euros, nominal revenues of the German electrical and digital industry in April 2024 were 4.0 percent higher than in the same month last year. Sales with domestic customers amounted to 9.1 billion euros (+ 5.0%) and with foreign customers 9.6 billion euros (+ 3.1%). While sales with business partners from the eurozone increased by 2.3 percent to 3.5 billion euros in April, sales with customers outside the common currency area rose by 3.6 percent to 6.1 billion euros.

From January to April 2024, aggregate industry revenues fell by 5.8 percent year-on-year to EUR 74.1 billion. Domestic business worth EUR 35.7 billion was done in the first four months (- 6.0%), and abroad EUR 38.4 billion (- 5.6%). The development of sales with partners from the euro area (- 4.4% to EUR 14.1 billion) was less unfavorable than that with customers from third countries (- 6.3% to EUR 24.3 billion). There were no significant changes in either production or employment plans in May 2024 compared to the previous month. The German electrical and digital industry employed 900,700 people at the end of the first quarter of this year, of whom 30,200 are currently on short-time work.

“The business climate has recently brightened again after the setback in April,” said Gontermann. “Both the assessment of the current situation and general business expectations were better than in the previous month.” 

Export expectations also increased in May.