Record Industrial Figures Drive “Self-Sustaining” German Economic Recovery
Germany’s traditional strength in industry is serving the country well as it emerges from the economic downswing caused by the coronavirus pandemic.
The Federal Office of Statistics says that unfilled manufacturing orders are the highest ever since it began collecting the relevant data in 2015 – and 11.4 percent above where they were in the final pre-pandemic month of February 2020. Orders went up 2.9 percent in April 2021, the eleventh straight monthly increase.
Moreover, the 30 leading companies on Germany blue-chip DAX stock exchange generated EUR 362 billion euros in revenues between January and March of this year – a newly quarterly record. They also reported almost EUR 42 billion in profits, twice as much as the same period last year.
The economic recoveries in China and the United States, major customers for German-produced goods, is powering these stellar numbers and bolstering economic optimism for Germany. The Kiel Insitute for the World Economy (IfW), for instance, has raised its 2021 GDP growth forecast from 3.7 to 3.9 percent.
“The steam pressure in the German economy is high,” said IfW Head of Forecasting Stefan Kooth in a statement. “Demand, additionally fueled by pent-up purchasing power and government stimulus programs, is meeting supply constraints due to supply-side frictions. All in all, the signs are pointing to strong expansion…Germany’s upswing is self-sustaining.”
The German Institute for Economic Research (DIW Berlin) is less bullish but nonetheless raised its growth forecast from 3 to 3.2 percent. For 2022, the two institutes predict 4.8 (IfW) and 4.3 (DIW Berlin) percent growth.
Revenues are increasing across a number of sectors. The German chemicals industry is predicted to reach a record EUR 208 billion in annual turnover in 2021. Prognosis for the electronics, IT and logistics industries and German retail also exceed levels from the final pre-corona year of 2019.
“German industry has consistently exploited its strengths,” Martin Eisenhut, the head of the German wing of global consultant Kearney, told business newspaper Handelsblatt. “Because of its high percentage of exports, it was able to profit quickly from economic recovery in Asia and compensate for weaknesses in Europe.”