Germany’s industrial production falls in September due to supply chain shortage

Steel workers at ThyssenKrupp AG, a German industrial conglomerate, are releasing sparks of raw iron from the blast furnace of Germany’s largest steel plant in Duisburg, Germany, on January 28, 2019. (Wolfgang Rattay / Reuters)

Berlin — Germany’s industrial production fell unexpectedly in September. According to official data on Friday, bottlenecks in the supply of raw materials and reserves in Europe’s largest economy continued to hurt production.

The Federal Bureau of Statistics said the month’s industrial output fell 1.1% after an upwardly revised 3.5% fall in August. A Reuters poll pointed to a 1% increase in September.

Compared to the previous quarter, manufacturing production fell 2.4% in the third quarter, now 9.5% lower than in February 2020, before measures to curb the coronavirus pandemic in Germany began. I am.

According to the Ministry of Economy, the fall in September was due to a drop in production in the mechanical engineering, electrical equipment and data processing equipment sectors.

“The long-standing bottleneck in the supply of raw materials and intermediate products is reflected in a broader sense,” the ministry said.

VP Bank economist Thomas Gitzel said Germany’s industrial production outlook is bleak as companies expect material shortages to continue until the end of next year.

Rising gas and electricity prices were an additional negative factor putting pressure on production, he said.

“The next quarter will continue to be difficult,” Gitzel said, adding that Germany’s economic output is expected to stagnate in the fourth quarter.

“But when the material flow resumes, it’s also clear that the current situation will be reversed,” he said.