Situation Worsens for German Automakers
The business situation for German automotive manufacturers and their suppliers has worsened slightly, finds the latest ifo Institute survey. In February, the indicator for this industry fell to plus 6.0 points, down from plus 12.5 points in January. “Manufacturers in particular assess their current situation as drastically worse than in the previous month. This presumably has to do with the fact that buyers are being very cautious at the moment,” says Prof. Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. Suppliers, on the other hand, rate their current situation as better than in the previous month.
Manufacturers’ business expectations also dimmed in February, falling from plus 21.4 points* to plus 2.8 points. “While manufacturers are still currently working through existing orders, demand from potential buyers is faltering. One reason could be the uncertain development of electricity prices. In addition, there is talk of rationing power for recharging car batteries,” Falck says. At the same time, automakers expect exports to grow. The bottom line is that fewer automakers plan to expand production in the coming months.
Suppliers, meanwhile, were more confident. They rated their order backlog as slightly better than in the previous month. Supplies of intermediate products are also improving: 53.0 percent of businesses reported shortages, down from 55.1 percent in January. However, suppliers’ outlook is less optimistic. The expectations indicator fell to minus 9.7 points, down from minus 3.9 points*. Fewer companies are planning to increase their production than in the previous month. They also foresee little in the way of impetus from international markets: export expectations dropped to minus 5.8 points in February.
*Seasonally adjusted
