Agencies
The German economy is witnessing the worst recorded slump in orders since the 2009 financial crisis, a top economic institute said on Monday, amid warnings that the country’s dependence on imported raw materials is worse than ever.
The Munich-based ifo Institute said 41.5% of German companies reported a lack of orders in October, up from 39.4% in the last survey in July.
The quarterly figure is higher than the institute recorded at any point during the coronavirus pandemic.
“The lack of orders is continuing to hinder economic development in Germany,” said ifo economist Klaus Wohlrabe. “Hardly any industry has been spared.” Some sectors were hit harder than others, with almost half of manufacturing companies (47.7%) seeing a lack of orders.
Among companies manufacturing basic metals, 68.3% recorded a lack of orders, as did 59.9% of metal products manufacturers.
Germany’s key automotive and chemical industries saw around 44% of businesses report a lack of orders.
The trade sector also recorded its highest rate of companies seeing a lack of orders since at least 2006, at 65.5%. Among retail companies, the figure was 56.4%.
The situation among service providers was somewhat better, with only 32.1% reporting a lack of orders, up from 31.2%.
Recruitment agencies were particularly badly hit, Wohlrabe said, because “temporary workers are less in demand.” In contrast, legal and tax consultants, as well as auditors, were more positive about their situation as a result of “high levels of bureaucracy and regulation,” the institute said.
In further concerning developments for Europe’s largest economy on Monday, the Federation of German Industries (BDI) said the country is too reliant on countries including China for critical resources such as lithium.A suspension of Chinese lithium exports could cost the German economy around 115 billion euros ($122 billion) in lost revenue, representing around 15% of industrial output, according to the association.
In a study presented in Berlin, the BDI said Germany’s automotive industry is particularly affected, as lithium is essential to the manufacturing of electric vehicles.
“Politicians must do everything they can to prevent a worst-case scenario,” said BDI president Siegfried Russwurm.
Germany currently imports half of its lithium products from China, up from 18% in 2014.
