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News Article: Economic Pressures Persist as Order Shortages Persist Among German Businesses
A new report from the ifo Institute reveals a continuing shortage of orders particularly among self-employed and microbusinesses in Germany, with almost half (43.6%) reporting too few orders in August 2025. Although this is a slight improvement from the 48.4% reported in April, it remains significantly above the 36.7% for the broader economy [1].
The retail sector is also reflecting this downturn, with a deteriorating business climate and reduced sales reported in July 2025 [1]. The proportion of companies in the retail sector reporting insufficient orders has risen slightly to 51.0% compared to the previous quarter. Every second company in the retail sector still reports insufficient demand [1].
In the industrial sector, the situation remains challenging. The proportion of companies with insufficient orders has risen to 38.3%, with the automotive industry experiencing a significant increase in order shortages, with 42.6% of companies reporting insufficient orders [1]. The mechanical engineering sector also reports an order shortage of 46.1%, while electrical equipment manufacturers have an order shortage of 40.6% [1].
The wholesale sector has not improved compared to the previous quarter, with the proportion of companies complaining about a lack of orders increasing significantly to 66.2% [1]. This is more significant compared to the retail sector, where the increase in the proportion of companies with insufficient orders is minimal.
The accommodation industry has an order shortage of 54.2%, while advertising agencies and market research companies have an order shortage of 51.4% [1]. Temporary employment agencies continue to be affected, although the proportion of companies with order shortages has decreased to 56.3% compared to the previous quarter [1].
In manufacturing, new orders declined by 1.0% in June 2025 compared to the previous month, while production fell 1.9%, signaling weakening demand in the industrial sector [2]. However, the stock of orders in manufacturing had shown a slight increase of 0.4% in May 2025, indicating some variability but overall softness in order flow [2].
Other sectors show mixed trends. For example, the toy industry in the U.S. anticipates shortages due to earlier production reductions and tariff-related disruptions, which may be comparable to supply chain effects in other discretionary consumer goods sectors [4].
In summary, the latest ifo Institute data report significant order shortages especially among self-employed service providers and retailers, and a modest decline in manufacturing orders in mid-2025. These findings reflect an uneven but cautious economic environment with pressures on order books across multiple sectors.
[1] ifo Institute, August 2025. [2] Destatis, July 2025. [4] The New York Times, July 2025.
- In light of the ongoing economic pressures, the finance industry might face challenging times as businesses across sectors struggle with order shortages.
- As numerous industries, including retail and manufacturing, grapple with insufficient orders, the broader business landscape could potentially see a slowdown in growth due to the persistent order shortages.
