German industry suffered an unexpectedly sharp drop in orders in August.

The companies collected 7.7 percent fewer orders than in the previous month, as the Federal Statistical Office announced on Wednesday.

That was the biggest decline since April 2020, when the Corona crisis emptied the order books.

Economists polled by the Reuters news agency had only expected a decline of 2.1 percent.

The slump follows, however, very strong increases in the previous months of July (+4.9 percent) and June (+4.6 percent), which came about as a result of large orders for aircraft, ships and trains.

"There were an above-average number of large orders for August, but fewer than in the previous months," said a statistician from the Federal Office.

Even without taking into account the large-scale orders, which are prone to fluctuations, incoming orders fell by 5.1 percent in a month-on-month comparison.

The car manufacturers' company holidays, which fell in August, are also likely to have contributed to the deficit.

Auto industry "a brake block for German industry"

According to the information, orders in the automotive industry fell particularly sharply.

Many manufacturers create delivery bottlenecks for important parts and raw materials: According to calculations by statisticians, orders for vehicles and vehicle parts fell by 12 percent in August.

"Today's figures are further evidence that the auto sector is currently a major drag on German industry," commented Ralph Solveen, Deputy Head of Economic Research at Commerzbank.

He also referred to the weak figures for the automotive industry, which the industry association VDA published yesterday.

“The sharp drop in incoming orders shows that the shortage of materials is also severely slowing down incoming orders.

If it is already clear that delivery cannot be made, many companies do not even order, ”said VP Bank's chief economist, Thomas Gitzel.

"The shortage of intermediate products is currently a very serious short-term economic risk."

Ministry: Still more orders than before Corona

The Ministry of Economic Affairs, on the other hand, emphasized that incoming orders are still 8.5 percent higher than before the start of the restrictions in the wake of the corona pandemic.

"Overall, the orders in the manufacturing industry were still at a high level," it said from there.

Compared to August 2020, the month of the previous year, which was significantly affected by the pandemic, they even increased by 11.7 percent.

One reason for the sharp decline is the lower demand for exports from abroad.

It was 9.5 percent weaker than in July.

Orders from the euro zone increased by 1.6 percent, while those from the rest of the world fell by 15.2 percent.

Domestic orders fell by 5.2 percent.

Leading institutes have only just lowered their growth forecast for the German economy this year, because the industry is sitting on full order books, but cannot keep up with production due to a lack of preliminary products - such as microchips.

The Kiel Institute for the World Economy (IfW) therefore lowered its growth forecast from 3.9 to 2.6 percent.

In this context, Carsten Brzeski, head of macroeconomic research at ING, sees something positive in the decline in orders.

"It brings some relief for German manufacturers, who are increasingly suffering from high order backlogs," said the economist.

"In view of the still well-filled order books and low inventory levels, the future of industrial production should be extremely bright - if it weren't for the ongoing friction in the supply chain."