Ifo-Insititut: Stimmung in Elektroindustrie steigt deutlich

The German federal Institute of Economic Research, Ifo, reported on Thursday that the mood within the electro-industry sector has significantly improved. According to a business climate survey, the sector's index rose to 24.8 points in September, up from 16.5 points in August. The current business conditions improved notably from 15 to 29 points. Moreover, expectations for the following six months have increased.

Klaus Wohlrabe, an Ifo expert, stated, "The electro-industry is increasingly becoming a locomotive for the German economy. While many other industries still struggle with weak demand, the electro-industry's business is already progressing much better." The demand for the sector, which includes manufacturers of data processing devices, electronic and optical products, saw a positive trend in September.

Businesses recorded significantly more new orders and expressed satisfaction for the first time in a long time with their order backlog. Consequently, production plans are more expansion-oriented: the companies aim to increase their manufacturing in the coming months. "Exports are also expected to provide impulses," the report said.

However, the good order situation brings problems and challenges as well. Around 40 percent of the companies report a lack of pre-production products. Simultaneously, more companies intend to raise their sales prices. "Demand is not the current problem," said Ifo survey chief Wohlrabe. "Supply constraints could become the bottleneck." For more details, see the Deutsche Elektroexport boom.