Industry Report | Industrial production and trade in the individual industries 13/06/2022
to load and distribute the goods are all in short supply. One-off factors such as China’s zero-Covid strategy and the hostilities in Ukraine are compounding the situation. Incoming orders have continued to point down, according to the latest figures, and showed negative growth in March year on year for the first time since January 2021. Capacity utilisation dropped down to 87.3 percent in April but is still just over its long-term average. Companies have been facing enormous cost pressure for several months. The trend in producer prices for industrial products exemplifies the problem. According to Federal Statistical Office figures, these were 30.9 percent higher in March than one year previously. An increase of this magnitude has never yet been recorded since the data series began in 1949. Despite all these turbulences, the situation on the labour market is still favourable with companies reporting the need for more staff. Shortages in engineers and skilled labour is dampening the euphoria here slightly. Outlook Many companies regard their business expectations as poor. The persisting hostilities in Ukraine are causing uncertainty and tangibly curbing investment propensity. The war and the strained situation in China will stand in the way of any easing up of supply chains. On the contrary, most machinery manufacturers expect the situation to get worse in the next few months before a potential easing towards the end of the year. In the case of electronic components, many companies do not expect supplies to improve before the beginning of next year. With this in mind, many manufacturers have reviewed their supply chains closely aiming for broader supplier networks, regional diversification and higher inventories to increase supply security. The dependency of industry on Russian gas is jeopardising economic growth like a sword of Damocles. On account of the substantially dampened prospects, the German Mechanical Engineering Industry Association’s (VDMA) has downwardly adjusted its production forecast to plus one percent in real terms. The labour market is the only ray of light. Despite the difficult environment, 89 percent of personnel managers in mechanical and plant engineering plan to take on more staff in the next six months. The large majority of these companies regards an increase in their workforce of up to five percent as realistic.
Contact: Florian Scholl / Phone: +49 69 6603 1474 / Mail: Florian.Scholl@vdma.org
Nonferrous metal industry The German nonferrous metal industry is worried about the second half of 2022. The main concern of companies in the industry is that shortages in materials will keep getting worse and a continuing increase in energy prices. Incoming orders are still robust in almost all segments. In 2021, the industry produced 7.1 million tonnes (up six percent year on year) and a revenue of 66 billion euros with a combined workforce of 105,000 employees and 625 companies. Domestic sales accounted for 53 percent of the revenue and represents the industry’s biggest market. The nonferrous metal industry is divided into the following stages of the value chain: production (raw metal), semi-finished products (ribbon, sheets, rods, profiles, pipes and wire), further processing (foil, thin ribbon, tubes, aerosol cans, other cans and powder), casting and hot-dip galvanising. In 2021, the aluminium industry produced around 1.1 million tonnes of raw aluminium, almost as much as in the previous year. The semi-finished aluminium product industry recorded an increase in production of twelve percent, going up to 2.7 million tonnes. Production in the aluminium further processing segment expanded by one percent to
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