The Ifo Institute diagnoses relaxation, but not yet a sustainable recovery, and warns of uncertainties.

The order shortage in the German economy is declining. In April, only 37.3 percent of companies reported it in a survey conducted by the Munich-based Ifo Institute. In January, the figure was 40.2 percent, according to the researchers, and even 41.5 percent in October 2024. This continues the easing that had already become apparent at the beginning of the year.

However, Klaus Wohlrabe, head of Ifo surveys, warns: "Despite the slight improvement, this is not yet a sustainable recovery." Demand remains subdued in many places, "and the current high level of uncertainty could quickly reverse the trend."

The situation improved particularly significantly in manufacturing. Here, the proportion of companies experiencing a lack of orders fell from 44.8 to 36.8 percent. The situation has eased particularly in the automotive and chemical industries, according to the survey. Both are slightly below the industry average. In mechanical engineering, however, the proportion remained very high at around 43 percent. The survey even shows an increase in the food and beverage industries, albeit at a low level.

The situation is significantly worse in the wholesale and retail sectors, with a good 61 percent, or around half, of the companies reporting a lack of orders.

In the service sector, the order shortage increased by one percentage point. However, at 32.2 percent, it is lower than in other sectors. Temporary employment agencies and the hotel industry are currently particularly hard hit.

This morning, the "Wise Men of Economics" will present their spring report with a new economic forecast. Shortly after the new federal government takes office, the five-member Council of Economic Experts is also expected to lower its growth expectations for the current year. A month ago, then-Economics Minister Robert Habeck (Greens) had downgraded the government's forecast.

The German economy is stagnating after two consecutive years of recession, and the slight improvement in the lack of orders is unlikely to be enough to change this.