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German industrial orders reach record high

·1-min read
German industrial orders soared despite global shortages in key components. (AFP/Ina FASSBENDER)

German industrial orders climbed to a new high in July, official data showed Monday, as the economy continued its strong recovery from the coronavirus pandemic.

The indicator rose 3.4 percent on the previous month to reach its "highest level since the beginning of the time series in 1991", when it began after the reunification of Germany, according to federal statistics agency Destatis.

Orders were up 24.4 percent compared with July last year, when the effects of pandemic-related shutdowns were still being felt acutely.

Compared with February 2020, the month before pandemic restrictions were imposed in Germany, orders were up 15.7 percent, the agency said.

The previous high point had been reached in December 2017, well before the pandemic.

The rise in the indicator was driven by orders from abroad. These were up 8.0 percent compared with the previous month, while domestic orders fell by 2.5 percent.

The record was achieved despite global shortages in components, such as semiconductors, timber and plastics, limiting production in key sectors for the German economy.

Carmakers including Volkswagen have scaled back production of their vehicles in response to the limited supply of computer chips, a crucial component in both conventional and electric vehicles.

The result was a "positive surprise", said LBBW bank economist Jens-Oliver Niklasch.

Commenting on the sharp difference between foreign and domestic demand, Niklasch added "the whole world needs German goods, but Germany cannot deliver."

sea/mfp/lth

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