German electrical industry records strong business climate in September

The mood in the German electrical industry is great. The business climate for the industry rose again in September - by 8.3 points to 24.8, according to the Munich Ifo Institute. This is the best value in years. In particular, the current business situation is better assessed. The value jumped by 14 points to 29. Business expectations also improved, but not quite as much.

“The electrical industry is increasingly developing into an economic driver within German industry,” says Ifo expert Klaus Wohlrabe. “While many industrial sectors are still struggling with weak demand, business here is already doing much better.”

According to Ifo, demand developed “extraordinarily positively” in September. Companies booked significantly more new orders and were satisfied with their order backlog for the first time in a long time. Many companies therefore want to expand their production in the coming months and impulses are also expected from foreign business.

However, the good order situation also brings with it challenges, according to the Ifo. Around 40 percent of companies reported missing intermediate products and more companies want to increase their sales prices. “Demand is not the problem at the moment,” says Wohlrabe. “On the other hand, the supply of preliminary products could become a bottleneck.”