The mood in Germany Automotive industry deteriorated significantly in November due to the slump in orders. The corresponding barometer fell to minus 32.1 points, from minus 28.6 points in October, the Munich Ifo Institute announced on Tuesday in its company survey. “The industry is stuck in the current mix of profound transformation, intense competition and a weak economy,” said Ifo industry expert Anita Wölfl.
Companies assess their current business situation to be significantly worse than in October. They are also even more pessimistic about the next six months. The low mood is primarily due to weak demand: “The mountain of orders that companies in the automotive industry have accumulated since the beginning of 2021 in view of the pandemic and supply chain problems has been processed,” said Ifo expert Wölfl. “New orders are coming in, but they are not enough in order to utilize capacity.”
The crisis in the industry is also reflected in the demand for labor: the indicator for employment expectations rose slightly in November, but remains near a long-term low at minus 34.1 points. “Many companies in the auto industry are holding back on hiring new employees or are discussing job cuts,” said Wölfl.
Companies are also pessimistic about the coming months when it comes to foreign business. However, there appears to have been no negative effect from the election of Republican Donald Trump, who threatened high import tariffs, as US President. The barometer for export expectations even rose noticeably – from minus 31.3 points in October to minus 19.2 points in November.
“Companies are still waiting to see how trade policy will develop,” said Wölfl. In addition, the dollar appreciated significantly after Trump’s election, which could benefit German exporters.