According to the March edition of the “ZVEI Business Cycle Report”, the German electrical and electronic industry registered modest performances in terms of new orders, production and turnover at the beginning of 2016. Besides, the business climate was markedly on the decline in February. Here are the data published by the German association of electrical and electronic manufacturers.
New orders
The German electrical and electronic industry has started the new year with a slight decrease in new orders by 0.3% (year over year) in January 2016. While domestic bookings rose by 2.2%, orders from abroad missed their pre-year level by 2.4%. Thereby, bookings from euro zone customers and third countries decreased by 5.9% and 0.3%, respectively. In the full year 2015 the German E&E industry’s companies received 7% more new orders than in the previous year. This was due in particular to a strong demand from abroad which resulted 10.3% higher than in 2014. Here bookings from euro area clients increased by 9.6% and orders from third countries even by 10.7%. Domestic demand in the last year went up considerably less strongly by 3.3%.
Production
The production – adjusted for price – has slightly exceeded its pre-year level in January 2016 by 0.3%. The output in the entire last year 2015 was revised upward somewhat and turned out to be 1.3% higher than in the year before. The sector’s firms’ production plans have – on balance – been unchanged in February of this year. 25% of the companies plan to increase their output in the next three months to come. 68% intend to maintain their current production level, and only 7% want to curtail it.
Turnover
In January 2016 sales of the German E&E industry expanded only very slightly by 0.1% (yoy) and came to 13.2 billion euro. Domestic turnover increased by 1.6% to 6.5 billion euro. Businesses with foreign customers, in contrast, decreased by 1.1% to 6.7 billion euro. Thereby, sales with euro area clients went down by 2.8% to 2.5 billion euro, and turnover with countries outside the euro zone picked up only marginally by 0.1%. It reached a volume of 4.2 billion euro. Over the full last year the sector’s turnover ended up 3.9% above its pre-year level and amounted to 178.5 billion euro. While domestic sales dropped slightly by 0.1% to 86.5 billion euro, foreign sales went up significantly by 8% and came to 92 billion euro. For 2016 the ZVEI expects the E&E industry’s total turnover to rise by about 2% to 182 billion euro.
Business climate
The business climate index for the German E&E industry has sunk in February of this year. The companies’ assessment of their current economic situation was slightly worse than in the previous month, but the overall business expectations declined markedly. 28% of the sector’s firms evaluate their present situation as good, 62% as stable and 10% as bad. At the same time, 18% of the companies reckon with rising, 70% with steady and 12% with slowing affairs in the next six months to come. The share of firms with positive expectations exceeded that of companies with negative expectations by 6 %-age points in February. Back in January this key figure still came to 17 %-age points. Export expectations have weakened too in February. At least, all business climate indicators remain located above the zero line.
