German electrical and digital industry: Positive economic signals in March 2025
According to the German Electrical and Electronic Manufacturers' Association ZVEI e.V., new orders rose by 11.6% year-on-year, with orders in the first quarter of 2025 up 3.2%.
The German electrical and digital industry sent positive economic signals in March. After several consecutive months of decline, order intake rose once again, exceeding the previous year's figure by 11.6%. “Given the many setbacks over a long period, we cannot yet say whether this marks the long-awaited turning point,” said Dr Andreas Gontermann, Chief Economist at ZVEI e.V., headquartered in Frankfurt am Main, Germany. “For that, the recent trend would need to continue sustainably in the coming months.”
Domestic orders in March were up by more than a fifth (+21.2%), while growth in foreign orders was more moderate at 5.1%. Orders from the eurozone rose by 7.8% and by 3.4% from non-eurozone countries.
Slight decline in domestic orders, increase in orders from abroad
This means that the entire first quarter of 2025 also saw growth in orders, up 3.2% compared to the previous year. Here, a slight decline in domestic orders of 0.6% was offset by a 6.3% increase in foreign orders. Orders from the eurozone increased by 2.9% in this period, while orders from outside the currency area rose by 8.3%.
Real, price-adjusted production of electrical and electronic products in Germany was 2.9% higher in March 2025 than a year earlier. “However, it should be noted that March 2025 had one more working day than March 2024,” Gontermann added. Looking at the entire first quarter, there has not yet been a positive development year on year: cumulative production from January to March 2025 was still 2.5% below the previous year’s level.
Capacity utilisation in the sector rose at the start of the second quarter from 73.4% of normal full capacity three months ago to 77.8%, but remains clearly below the long-term average. The order backlog coverage also increased slightly, from 4.0 to 4.2 months of production.
The number of employees in the German electrical and digital industry recently stood at 885,800, with 33,700 on short-time work.
Revenues also developed positively
The revenues of German electrical and digital companies also developed positively in March 2025, rising to €20.0 billion – 4.5% higher than a year earlier. Domestic sales increased only slightly (+0.3% to €9.2 billion), while foreign sales grew more strongly (+8.2% to €10.8 billion). Both business with the eurozone (+12.8% to €4.3 billion) and with non-eurozone countries (+5.7% to €6.5 billion) saw increases.
For the entire first quarter, total sector revenue was still down by 0.8% at €54.1 billion. While sales to foreign customers rose by 2.2% to €29.2 billion, domestic sales continued their previous trend and fell by another 4.2% to €24.9 billion. Between January and March, companies generated €11.5 billion (+1.5%) in the eurozone and €17.7 billion (+2.6%) in non-eurozone countries.
After three months of recovery, the business climate in the German electrical and digital industry deteriorated again in April. “Although the assessment of the current situation was clearly better than in March, overall business expectations turned negative again,” said Gontermann. “Erratic US tariff policy was probably a key factor.” Export expectations in particular came under pressure: the balance of companies expecting higher or lower exports in the next three months dropped from +14 percentage points in March to minus one point in April.
Caption: The German electrical and digital industry sent positive economic signals in March. After several consecutive months of decline, order intake rose once again, exceeding the previous year's figure by 11.6%. (Image: IMAGO)
Source: ZVEI e.V.
www.zvei.org