The road to the top seems to have been paved for German industry. Factories received 3.2% more orders in December 2022 than the previous month. A striking movement, especially since in November there was a drop of 4.4 percent.
And that’s mainly due to the volume of orders received, thinks industry economist Albert-Jan Swart of ABN Amro. “Large orders have been received, including for the aviation industry,” he says. “If you don’t include these big orders, there is still a decline in German industry.”
However, the decline from November is minimal at 0.6%. Swart: ‘It’s surprising that the overall figures are significantly better than expected, because if you look at the leading indicators, they weren’t very positive for December. But the figures that are coming out now from the German statistics office are quite good.’
Quarterly figures
The figures are in stark contrast to the quarterly figures released by German statistics agency Destatis last week. They were pessimists. “German industry has obviously been in a slump for a while,” Swart says. “It had a lot to do with the Russian invasion of Ukraine and the energy crisis, but now we are seeing that optimism is slowly returning to German industry.”
Swart says German industrial firms were optimistic about next year for the first time since the January invasion. “They had positive expectations for the year for the first time, and that must partly be due to falling energy prices.”
Oil boycott
Whether the oil boycott on Russian products – which came into force yesterday – will throw a spanner in Germany’s wheels, Swart doesn’t dare say. “I think the oil boycott is not very important for the industry,” he continues. “There are some anecdotes of German companies switching from gas to diesel to power their factories, but gas prices have actually come down quite a bit since their peak in August.”
Swart therefore doesn’t think it will have much effect. Especially since diesel has also become more expensive and can become even more expensive due to the introduced oil sanctions. Worst-case scenario, those industrial companies that have switched can go back to gas, so Swart doesn’t foresee a big problem.
Happy Germany, happy Holland
Good numbers in Germany are also good news for Dutch industry. “Dutch industry is closely related to German industry, in part because Germany is the most important export market for Dutch companies,” Swart says. “And there we see that the figures have improved since November.”
He cites the NEVI Purchasing Managers Index as an example. This shows that pessimism is noticeably decreasing among Dutch purchasing managers of industrial companies. “And this will no doubt also have to do with the fact that Germans are less pessimistic.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
