German industrial production slump due to supply chain turmoil


Berlin-Germany’s industrial output plummeted in August since April last year due to supply chain turmoil that is curbing Europe’s largest economic growth and hitting the automotive sector particularly hard, official data said Thursday. Indicated.

According to the Federal Bureau of Statistics, monthly industrial output fell 4.0% after a 1.3% increase in July. A Reuters poll showed a 0.4% drop in August.

“Manufacturers continue to report production constraints due to a shortage of intermediate products,” the agency said in a statement.

Production of automobiles and auto parts fell by 17.5 percent per month.

German car companies have been struggling to meet the post-pandemic demand surge since the beginning of the year due to a shortage of microchips and other intermediate products.

Automaker BMW said group shipments fell 12.2% in the third quarter due to the microchip crisis.

On Tuesday, Daimler Truck boss Martin Daum said he expects a global chip shortage to continue to affect production next year.

“We will definitely deliver less than we could sell, and that will be true next year,” he said, and it is impossible to say how big the shortage is. I added.

“It’s a fight for all the chips,” he added.

Official data released Wednesday showed that German industrial orders fell more than expected in August due to weaker international demand two months after the unusually strong profits from major contracts. ..

However, the Ifo Institute for Economic Research, based in Munich, separately stated that production forecast surveys rose in September.

“The purchase order is still full. Currently, only material bottlenecks are causing problems and are somewhat weakening production planning,” said Klaus Wohlrabe, an economist at Ifo.

VPBank economist Thomas Gitzel said, “If the material flow goes back again, the conditions are in place for a significant recovery in industrial activity.”

For now, ING’s Carsten Brzeski said the turnaround seems to be “slower than faster.”

Separately, new home prices rose 12.6% year-on-year in August, the largest increase since November 1970. German consumer prices rose 4.1% year-on-year last month.

LBBW economist Jens-Oliver Niklasch commented:

Paul Carell and Renee Wagner

Reuters

follow

Posted on