Despite increased production, German industry is “not out of the forest”

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Berlin — Germany’s industrial production increased more than expected in October, showing rare signs of manufacturing strength, but analysts said the bottleneck in the supply of raw materials and intermediate goods was Europe’s largest. He warned that it would continue to hinder the production of the economy.

According to the Federal Bureau of Statistics, monthly industrial output rose 2.8% after a 0.5% drop in September. A Reuters poll pointed to a 0.8% increase in October.

However, overall production was still 6.5% lower than in February 2020, the month before the pandemic regulation came into effect.

Jorg Kramer, Chief Economist at Commerzbank, said:

Germany’s industrial orders also recorded a much larger than expected decline in October, further clouding manufacturers’ growth prospects, data said Monday.

Kraemer points out that nearly three-quarters of companies are still dissatisfied with material shortages that impede production, adding that continued closures of Chinese factories and ports due to the coronavirus infection mean that problems will continue. rice field.

According to the Statistics Bureau, the auto industry increased production by 12.6% in October, Kramer said, contributing to the overall increase in production.

The automotive industry was plagued by bulging purchase orders and was unable to process orders due to a serious bottleneck.

“Despite the drop in new orders yesterday, orders are certainly there to significantly expand production over the long term,” said LBBW’s Jens Oliverni Crash.

Reuters

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