Domestic orders fell particularly sharply - by 18%. Foreign orders fell by 9%, with a sharper fall in eurozone countries (-14%) and in non-eurozone countries by 7%. The trend continued in June alone, with orders down 9% year on year. Domestic orders fell by 8% and orders from abroad fell by 10%, with eurozone countries down 12% and non-eurozone countries down 8%.
VDMA traditionally makes comparisons in “real terms”. While nominal figures compare direct sales figures, VDMA subtracts price inflation for a more comparable basis. “This year the difference in prices was not that big and amounted to +2%, while last year it was +9%,” reports VDMA chief economist Ralf Wiechers.
He explains that the calculations trying to account for the increase in consumption of materials and services, and to what extent they can be transferred. He also points out that the opposite trend is currently taking place in China, where there is deflation and lower prices due to high inventories. He also mentions lower steel prices due to subsidies in China.
“The overall order situation is disappointing,” Wiechers wrote in a VDMA statement about the figures. “There is no sign of a turning point yet, and, what’s worse, the economic stabilization that was still in sight at the beginning of the year has recently begun to decline,” he continues. In this context, he calls for supply-side policies to increase investment and innovation “to ensure that the first signs of a cyclical recovery driven by foreign investment are not derailed.”
