Zvei: orders were quite flat in April

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According to Zvei Business Cycle Report (June edition), new orders in the German electrical and electronic industry have exceeded their pre-year level only slightly in April 2014. Overall they rose by 0.4%. While bookings from abroad increased by 4.9% (year over year), domestic clients ordered 4.3% less. By far the strongest impetus in April came from the euro area. Here customers booked 8.4% more than a year earlier. New orders from third countries grew by 2.9%. Accumulated from January through April of this year incoming orders were 1.7% up on their pre-year level. Again, rising foreign orders (plus 4.6%) and falling domestic orders (minus 1.3%) have faced each other. Clients from the eurozone and from third countries increased their bookings by 3.7% and 5.2% in the first four months of this year, respectively.

Production keeps its slight upward tendency
The sector’s production – adjusted for price – has risen by 1% (again year-on-year rate) in April 2014. Hence, output keeps its slight upward tendency. The increase in production in April was first and foremost brought about by the intermediate goods subsector of electronic components and systems. Over the entire period between January and April of this year total output exceeded its pre-year level by 2% The production plans of the E&E industry’s firms have fallen behind their pre-month level somewhat in May of this year. However, on balance they are still expansive. 24% of the companies plan to raise their output in the next three months to come, whereas merely 6% intend to curtail it.

Turnover roughly remains at its pre-year level in April
With a very small plus of 0.2% to 13.8 billion € sales of the sector’s companies more or less stagnated on their pre-year level in April. As with new orders, foreign and domestic turnover have developed in opposite directions. The former increased by 3.5% to 6.9 billion €, whereas the latter decreased by 3.2% to also 6.9 billion €. Sales to euro area customers soared by 11.6% to 2.6 billion €, but turnover in third countries (of 4.3 billion €) failed its pre-year level by 0.8%. From January through April 2014 overall sales came to 55.1 billion € and therewith were 3% up on their 2013 level. Here domestic and foreign turnover rose by 1.3% (to 27.7 billion €) and 4.6% (to 27.4 billion €), respectively. Sales to clients from the eurozone picked up by 4.4% (to 10.2 billion €), and businesses with third countries (of 17.2 billion €) were 4.8% up on their pre-year level.

Business climate decreases slightly in May
The business climate in the German E&E industry has fallen off slightly in May of this year. Indeed, the uncertainty caused by the crisis in the Ukraine should be a reason for this decline. However, the business climate within the sector is still clearly in the positive range. While the companies’ assessment of their current economic situation decreased only very slightly in May compared to April, overall business expectations for the next six months to come have been revised downwards comparatively more strongly. 39% of the sector’s firms presently evaluate their actual situation as good, 47% as stable and 14% as bad. At the same time, 27% of the companies reckon with rising businesses in the next six months ahead. 68% and 5% of the firms expect stable and declining activities, respectively. Export expectations for the next three months to come have more or less stayed the same in May.

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