ZVEI: published the latest Business Cycle Report


ZVEI published its latest Business Cycle Report (January 2022 edition). According to the research, new orders in the German electro and digital industry picked up by 5.0% (year over year) in November 2021. It was the second consecutive month with a single-digit growth rate only. However, the recent weaker increase is not least also due to a base effect because back in November 2020 bookings had grown at a double-digit rate. Domestic orders fell by 3.4% year on year in November 2021, while foreign orders rose by 12.7%. Customers from the euro zone ordered 0.6% less. Bookings from third countries, in contrast, increased markedly by 21.1%. With it, in the first eleven months of last year new orders exceeded their pre-year level by 22.5%. Domestic bookings grew by 17.3%. Foreign bookings rose even more strongly by 26.9%. New orders from the euro area (+23.1%) and from third countries (+29.0%) soared at a similar rate.
The sector’s production – adjusted for price – came in 1.5% higher than a year earlier in November 2021. Accumulated from January through November of last year the output of electric and digital products went up by 9.5% compared to the same period in 2020. The electrical companies significantly raised their production plans again in December after a slight increase in November. The balance of companies that want to produce more or less in the next three months ahead is now +36 percentage points (November: +25). However, supply chain bottlenecks continue to play a role. The recruiting plans improved in December. The number of companies that want to increase staff in the near future exceeds the number of those planning redundancies by another 31%-age points. The number of total employees within the domestic electro and digital sector stood at 875,000 at last. Merely 15,000 still work on short time schedules.
Besides, the domestic electro and digital industry’s sales exceeded their pre-year level by 5.9% in November 2021 and came to €18.3bn. Domestic and foreign turnover grew by 5.6% (to €8.9bn) and by 6.2% (to €9.4bn), respectively. While sales to euro zone customers merely achieved a plus of 2.8% to €3.4bn in November 2021, businesses with third countries improved by 8.0% to €6.0bn. In the full period from January through November 2021 the electro and digital industry’s aggregated turnover amounted to €181.4bn, leaving it 9.8% higher than a year earlier. Here revenues with domestic and foreign customers grew by 8.5% (to €85.1bn) and by 11.1% (to €96.3bn), respectively. Sales to the euro area were 9.0% up on their pre-year level, reaching €34.6bn. Eventually, turnover with clients from third countries increased by 12.2% to €61.7bn.
After the business climate in the German electro and digital industry had clouded over from August to November 2021, it became friendlier again in December 2021. The current situation was rated slightly better than in November. Business expectations even improved significantly compared to the previous month. 54% of the sector’s companies assessed their current economic situation as good in September. 36% and 10% interpreted it as stable or rather bad, respectively. Looking ahead for the next six months to come, 25% of the firms are awaiting rising activities. 62% reckon with stable affairs, and 13% expect their future businesses to fall behind. The companies’ export expectations deteriorated somewhat again in December. Here the balance of firms that expect more or less exports in the next three months to come fell by 3%-age points compared to the previous month to a reading of +17.