Shortage of preliminary products: backlog of orders in German industry is getting longer again

After the slight decline at the beginning of the year, the order backlog in German industrial companies has become longer again.

The number of orders in February grew by 1.0 percent compared to the previous month, as the Federal Statistical Office announced on Thursday.

The reason for this is the shortage of primary products in Ukraine that existed even before the war.

"As a result, many companies have problems processing incoming orders," the statisticians explained.

Open orders from Germany increased by 0.5 percent, those from abroad by as much as 1.3 percent.

Since June 2020, companies have received more new orders month by month than they could process - with the exception of January 2022. For example, car manufacturers lack the coveted microchips, which is why they cannot build as many vehicles as actually possible despite strong demand.

The order backlog in February was therefore 20.5 percent higher than a year earlier.

New high in processing time

At the same time, its reach has increased to a record level.

In February, at 7.9 months, it marked "a new high since the beginning of the time series in 2015", as the statisticians emphasized. The range of 11.4 months is particularly high for manufacturers of capital goods such as machines and vehicles , how many months the companies would theoretically have to produce with constant sales without new incoming orders in order to process the existing orders.

The export-dependent German industry is expecting a difficult year.

The main reason for this is the Russian invasion of Ukraine, which is also affecting the global economy.

According to the International Monetary Fund (IMF), this will increase by 3.6 percent in 2022, after 6.1 percent in 2021. Compared to the estimates in January, the IMF has lowered its forecast by 0.8 points.

In addition to the consequences of the war, the new corona wave is also causing problems for the economy in its most important trading partner China, which is sending metropolises like Shanghai into lockdown, which is disrupting supply chains and trade.