Increase in Industrial Orders Observed in May
**German Industry Order Backlog Remains Robust in May 2025, Sector-wise Analysis Reveals Mixed Trends**
In May 2025, the German industry's order backlog remained steady, showing a slight increase compared to the same month last year. Although the overall result was negatively impacted by a decrease in the automotive industry, other sectors demonstrated resilience and growth.
The mechanical engineering sector, while experiencing a decline in incoming orders year-over-year, showed a positive surprise in May 2025 due to a lower prior-year base. The mood among companies remains tense due to significant regional differences in sales.
On the other hand, the defense and marine sectors, particularly Thyssenkrupp Marine Systems (TKMS), have seen a strong increase in orders, partly due to increased orders for submarines from countries like Germany and Singapore. This growth suggests a strong outlook for these sectors.
The automotive industry, however, faces challenges due to U.S. tariffs, leading to a decline in exports. Companies like BMW and Daimler are relocating production to mitigate these effects. Despite these challenges, the sector remains a significant contributor to Germany's exports, though its resilience is being tested by protectionist policies.
In May 2025, the order backlog did not decrease compared to the previous month of April. The increase is mainly due to developments in the "Other Vehicle Manufacturing" sector, which saw a seasonally and calendar-adjusted increase of 2.1 percent. Foreign orders also increased by 0.8 percent compared to April.
It's worth noting that the order backlog in May 2025, when compared to the previous month of April, did not show a decrease. The order backlog remained constant at 7.8 months, indicating that it would take the same amount of time to clear existing orders at a constant turnover without new business.
An increase in the production of metal products of 2.4 percent also had a positive effect on the order backlog. However, domestic orders fell by 0.3 percent compared to April, partially offsetting these gains.
In summary, while specific sector-wise data for May 2025 is not detailed, the defense and marine sectors are experiencing growth due to significant orders, while the mechanical engineering and automotive sectors face challenges but show signs of resilience and adaptation. The order backlog in May 2025, when compared to May 2024, showed an increase, indicating a robust demand for German products and services in the global market.
- The community could consider implementing a policy that supports vocational training programs in industries, such as mechanical engineering and automotive, to equip workers with the necessary skills and counterbalance the negative impacts on employment due to challenges faced by these sectors.
- A local business or finance institution might provide funding for vocational training initiatives aimed at expanding the skillsets of workers in industries like mechanical engineering and management, thereby helping these industries adapt to the changing market conditions and fostering long-term growth.
