Digital sector

The business climate in the industry has deteriorated since the start of the war in Ukraine with expectations in negative territory since March. Companies are still positive about their current business, although this component was down on the previous month in May for the first time since the start of the war.

The German Electro and Digital Industry Association (ZVEI) is nonetheless still currently forecasting growth in price-adjusted production for the industry of four percent in 2022. The order backlog is high and the good performance in the first quarter are positives while the general economic environment is increasing precarious.

Electro and digital exports also still pointing up

In 2021, German electro and digital exports increased 10.2 percent to 224.6 billion euros, exceeding the record level to date of 2019 by ten billion euros.

Exports to China, which is the most important destination of German electro and digital products, increased by 7.5 percent to 25.1 billion euros in 2021. Exports to the United States, the second biggest market for the industry, posted double digit growth with an increase of 10.2 percent to 19.1 billion euros. Exports to the euro area rose 14.6 percent to 73.4 billion euros in 2021, accounting for almost one third of total German electro exports.

The industry continued its upward trend in the first quarter 2022, growing 5.1 percent compared to the same quarter last year. As exports to Russia and Ukraine only accounted for around two percent of total exports, the decrease in exports to these countries has barely affected the overall performance of the German electro and digital industry.

Export expectations suffered a hefty setback at the beginning of the war in Ukraine. At plus nine percentage points in May, they are nonetheless still in positive territory.

Contact: Matthias Düllmann / Phone: +49 69 6302 329 / Mail: matthias.duellmann@zvei.org

Digital sector

The business climate in the German digital sector improved tangibly in April thanks to the full order books of information and communications technology companies. Current business in the sector was rated more positively than it has been since May 2019. The two-year high in incoming orders also caused a robust increase in the Bitkom ifo digital index. This index visualises business sentiment in the digital sector and is composed of assessments of the current business situation and expectations for the next six months. In April, the digital index increased by 8.9 points to 26, bringing it closer to the level it was at before the outbreak of the war in Ukraine. Business prospects have also improved markedly, turning around from minus 4.1 to plus 5.5 points. This means that the majority of companies surveyed no longer expect incoming orders to trend downwards but upwards in the next six months. The Russian war of aggression and the impact of sanctions are hampering overall economic development and exacerbating the already severe disruptions in supply chains, the slowdown in growth and the rapid rise in inflation. The digital industry is coping much better with these challenges than the industrial sector overall.