German industrial orders slump in August

Frankfurt (AFP) –


German industrial orders fell sharply in August, after a record month in July, official data released on Wednesday showed, as global supply bottlenecks pinch the economy.

The indicator, which gives a foretaste of industrial activity, fell by 7.7 percent on the upwardly revised figure for the previous month, according to the federal statistics agency Destatis.

In July, orders had reached their highest point since statistics for reunified Germany began in 1991, as demand sprung back after coronavirus restrictions were lifted in Europe's economic powerhouse.

In its latest release, Destatis revised the increase in July to 4.9 percent from its previous estimate of 3.4 percent.

Industrial orders failed to keep up the pace in August, despite showing a strong 11.7 percent increase on a year earlier.

The month-on-month drop was led by a steep 11.1 percent decline in orders of capital goods, while consumer and intermediate goods tailed off by 2.7 and 2.8 percent, respectively.

Orders for export fell by 9.5 percent, with those from outside the eurozone decreasing most by 15.2 percent.

The upheaval caused by the pandemic has given rise to 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.