By Andreas Plecko
FRANKFURT (Dow Jones) — The order backlog of German industry continued to rise in May and has reached a new record level. Compared to the previous month, it increased by 0.5 percent after calendar and seasonal adjustments, as reported by the Federal Statistical Office (Destatis). Compared to the same month last year, the order backlog was 16.9 percent higher after calendar adjustments. “This means that the order backlog in the manufacturing sector has reached a new high since records began in 2015,” explained Destatis.
Open orders from Germany increased by 0.7 percent in May and those from abroad by 0.3 percent. Although incoming orders increased at a much lower rate of 0.1 percent than sales at 3.2 percent, in May, as in the previous months, the volume of incoming orders in the manufacturing industry was higher than the volume of sales.
“The excess demand is likely to be primarily due to the persistently high shortage of primary products,” explained the statisticians. “Disrupted supply chains as a result of the war in Ukraine and ongoing disruptions caused by the Corona crisis, such as the closure of ports in China, continue to lead to problems in processing orders.”
In May, the range of orders on hand was 8.1 months, as in the previous month, and thus remained at its highest level since the start of the time series in 2015. The range for manufacturers of capital goods was 11.9 months, as in the previous month, and for intermediate goods it was the same as in 4.0 months in the previous months and 3.7 months for consumer goods (April: 3.6 months). Even if new orders were to stop abruptly, manufacturing companies could continue to produce on average for this period of time.
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(END) Dow Jones Newswires
July 19, 2022 02:12 PM ET (06:12 GMT)