German Electrical Industry Orders Rise 17 Percent in August on AI Demand
Germany’s electrical and digital industry recorded a sharp rise in incoming orders in August, driven heavily by growing demand for artificial intelligence infrastructure and data centers. Andreas Gontermann, chief economist at the German Electro and Digital Industry Association (ZVEI), told the Augsburger Allgemeine newspaper that incoming orders rose 17% in August compared with the same month in the previous year.
That August increase outpaced the average growth seen during the first seven months of the year. In the first half of the year, orders rose 9.5% year-on-year.
Gontermann linked the accelerating growth directly to technological expansion. “With a data centre, almost all components apart from the building shell come from our industry,” he said in remarks published on a Wednesday.
AI and defense orders drive sector growth
Researchers at the Ifo Institute also see a positive economic outlook for the sector, which employs roughly 865,000 workers across Germany. Klaus Wohlrabe, a researcher at the institute, pointed to a broader mix of industrial catalysts supporting manufacturers.
“Companies recorded significantly more new orders and, for the first time in quite a while, are satisfied with their order books again,” Wohlrabe said. He cited digitalization, automation, data center expansion, AI infrastructure, and defense orders as the primary growth drivers. Export expectations among German electrical firms also improved alongside the domestic order volume.
Official trade figures show the sector's international reach. Between January and July, exports by the German electrical industry climbed 9.7% to reach €162.9 billion ($183 billion) compared to the same seven-month period last year, according to ZVEI data.
Manufacturing demand slows job cuts
The surge in manufacturing demand has not yet translated into immediate hiring across the sector’s workforce of 865,000 people. Wohlrabe stated that the positive economic trends will take longer to feed through to the broader labor market.
The improved order book is expected to initially halt ongoing job cuts and reduce the use of reduced working hours, before companies begin opening new positions for hiring.
German electrical industry orders rise in August
How much did German electrical industry orders increase in August?
Incoming orders rose by 17% in August compared to the same period in the previous year, according to ZVEI chief economist Andreas Gontermann.
What specific technologies are driving the manufacturing growth?
Gontermann and Ifo Institute researcher Klaus Wohlrabe cited artificial intelligence infrastructure, data center expansions, automation, digitalization, and defense orders as the main catalysts.
How do export figures compare for the beginning of the year?
German electrical industry exports climbed 9.7% to €162.9 billion ($183 billion) between January and July compared to the same months last year.
What effect is the rising order volume having on employment?
The improved order situation is initially expected to halt job cuts and reduce reduced working hours before new hiring begins for the sector’s 865,000 employees.