The ifo business climate index for the German electronics industry climbed to 24.8 points in September, up from 16.5 in August. The current situation gauge improved from 15.0 to 29.0 points, and expectations also rose.
The ifo business climate index for the German electronics industry rose to 24.8 points in September, up from 16.5 points in August. The assessment of the current business situation improved sharply, from 15.0 to 29.0 points, and company expectations continued to climb. Demand developed exceptionally well, with firms reporting a marked rise in new orders and renewed satisfaction with their order books for the first time in a while.
ifo expert Klaus Wohlrabe calls the sector a growth engine within German industry, at a time when many other branches are still struggling with weak demand. Firms plan to expand production and expect further momentum from export business. For suppliers of AI hardware and electronic components this points to firming investment.
Still, around 40 percent of companies report shortages of intermediate goods, and more firms intend to raise their selling prices. Whether the current order strength holds will depend on how quickly supply bottlenecks for components ease.
What this means for decision-makers
- Secure supply chains for components, since about 40 percent of firms report shortages.
- Review pricing for electronic components given the trend toward higher selling prices.
- Use the current demand strength to align investment and capacity plans early.
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