Berlin / Wiesbaden (dpa) – Supply bottlenecks are slowing down German industry and, according to economists, are increasingly burdening the economic recovery in Europe’s largest economy.
In August, industrial production fell significantly by 4.0 compared to the previous month Percent, as the Federal Statistical Office announced on Thursday in Wiesbaden. This is the sharpest decline since the slump during the first Corona wave in spring 2020. It was also more violent than analysts expected. “The supply bottlenecks for raw materials and intermediate products turned out to be more serious than previously assumed,” commented the Federal Ministry of Economics.
According to an Ifo survey, companies are hoping for an increase in production. Economists expect, however, that industry will initially slow down the German economy.
Corona is having an impact
One of the reasons for the bottlenecks is the after-effects of the Corona crisis. In the course of the global economic recovery, the demand for semiconductors, for example, has risen sharply. Industrial companies sit on well-filled order books, but can sometimes not process them due to a lack of material. This affects mechanical engineering and car production, among others. The production lines at car companies keep coming to a standstill.
The production slump affected almost all sectors in August. The production of capital goods such as machines decreased particularly significantly. Activity in construction fell by 3.1 percent. Only energy production was higher than in July.
Compared to the same month last year, production increased by 1.7 percent overall. However, the expectations of experts were clearly missed here as well. Compared to February 2020, the month before the Corona crisis spread to Germany, total production is 9.0 percent lower.
No improvement in sight
Commerzbank chief economist Jörg Krämer currently sees no signs of improvement. “In this respect, the … figures confirm our expectation that the German economy will barely grow in the fourth quarter after a strong recovery in the summer half-year.”
According to ING chief economist Carsten Brzeski, the delivery bottlenecks are now a greater threat to German industry than the corona pandemic. The analysis company Capital Economics spoke of growing fears of a “bottleneck recession”, ie an economic slump as a result of bottlenecks on the supply side.
Despite the shortage of materials, the industry is hoping for an increase in production. The production expectation index compiled by the Ifo Institute rose by 2 to 29 points in September, making it one of the highest values in recent years. “The order books are still full, only the material shortages are causing problems at the moment and dampening the production plans somewhat,” said Klaus Wohlrabe, head of the Ifo surveys “That the companies can process the existing orders, said the economic researcher. The index also measures whether companies expect production to rise or fall. From a purely technical point of view, an expected improvement at a low level can therefore also generate a high index value Expect production to remain the same or decrease. The index results from the difference between the increasing and decreasing responses; it is adjusted for seasonal effects.