According to the ZVEI Business Cycle Report (August edition), in June the German electrical and electronic industries have raised their (price adjusted) output by 7.9% (yoy). Thus, the cumulated change has turned positive once again. From January through June of this year production was up by 0.8% from a year ago. All told, the pattern of very different rates of growth/change in single months remains. The capacity utilization in the E&E industry has risen slightly again at the beginning of the third quarter of this year. It increased by more than one percentage point from 82.7 to 83.8% of the normal full use level. The long-term average value is 83%. The firms’ production plans have been upshifted somewhat in July. 20% of the companies intend to raise their output in the next three months to come, 7% want to curb it. The rest doesn’t plan any change at all.
Bulk orders from abroad bring about a surge in new orders
Bulk orders from abroad have given the German electrical and electronic industry a surge in overall new orders by 23% (year over year) in June 2015. Domestic bookings rose by 4.3%, while foreign bookings soared by 38.5%. New orders from the euro area and from third countries exceeded their pre-year levels by 19.8% and 48.3% in June, respectively. Hence, for the complete first half-year of 2015 an increase in bookings of 6.9% (again year-on-year rate) is recorded. Domestic customers raised their orders by 1.3%, whereas foreign orders grew much more vigorously – namely by 11.8%. New bookings from the euro zone were 6.5% up on their pre-year level in the first six months of 2015. Clients from third countries ordered 15% more.
Turnover: two-digit growth in June
With 15.7 billion euro, sales of the German E&E industry have exceeded their pre-year level by 10.4% in June 2015. Domestic and foreign turnover rose by 8.3% to 7.6 billion euro and 12.4% to 8.1 billion euro in June 2015, respectively. Businesses with euro zone customers picked up by 22.1% (yoy) to 3.1 billion euro. Sales to third countries came to 5 billion euro and, with it, were 6.9% up. In the full first half-year of 2015 the sector’s overall turnover amounted to 85.9 billion euro, a plus of 4.2% (again year-on-year rate). Here a slight decrease in domestic sales by 1% to 41 billion and a huge increase in foreign sales by 9.1% to 44.9 billion euro have faced each other. Turnover with customers from the euro zone and third countries grew by 11.9% to 16.8 billion euro and 7.5% to 28.1 billion euro, respectively.
Slight decline in business climate also in July
The business climate in the German E&E industry has declined slightly in July of this year, too. Although the assessment of the current economic situation has changed for the better somewhat compared to June, overall business expectations for the next six months to come fell more considerably. 34% of the sector’s firms have evaluated their present situation in July as good, 59% as stable and 7% as bad. Regarding the look ahead, 23% of the companies are awaiting rising businesses in the next six months to come. At the same time, 67 and 10% of the firms have steady and declining expectations, respectively. Export expectations have dropped markedly in July.
