Status: 07.09.2021 11:12 a.m.
German industry continues to struggle with delivery bottlenecks as a result of the corona pandemic. Nevertheless, companies unexpectedly increased production significantly in July.
The second half of the year got off to a good start for the manufacturing industry in Germany. The total production rose in July compared to the previous month by 1.0 percent, as the Federal Statistical Office announced. The increase exceeds the average expectations of the experts. According to the final data, the production decline for June was also lower: the estimate of minus 1.3 percent was revised to minus 1.0 percent.
Particularly in demand for capital goods
According to the Federal Statistical Office, industrial production excluding energy and construction rose by 1.3 percent in July compared to June. Within industry, the production of capital goods increased by 3.2 percent and the production of consumer goods by 0.9 percent. In the case of intermediate goods, on the other hand, production fell by 0.5 percent. Outside of industry, power generation was 3.2 percent lower and construction output 1.1 percent higher than in the previous month.
German industry continues to struggle with delivery problems in the international trade in goods, most of which are attributable to the corona pandemic. Shortages and price increases for many raw materials and intermediate products were the result, which slows down production. Accordingly, total production is still well below its pre-crisis level.
Compared to the situation before the start of the pandemic-related restrictions, statisticians still recorded a low level: In July 2021, production in July 2021 was seasonally and calendar adjusted 5.5 percent below the comparative value of February 2020.
Car manufacturers are increasing their emissions
The car manufacturers in particular have recently suffered from the global shortage of materials. The important area of ”motor vehicles and motor vehicle parts” nevertheless recorded an increase of 1.9 percent in July, according to the Federal Ministry of Economics. Mechanical engineering, which is also highly weighted in the overall statistics, expanded by 6.9 percent.
The numbers indicated that the “low point could now be overcome,” said the ministry. In some initial statements, economists were less confident. An end to the downward trend is unlikely, said Commerzbank economist Ralph Solveen. The lack of preliminary products will continue to have a negative impact. Even Thomas Gitzel, chief economist at Liechtenstein’s VP Bank, does not yet expect a “rapid improvement”.
Order books bulging
The demand for goods from German production is still high. After a record number of orders was reported by the German manufacturing industry yesterday, the Munich-based Ifo Institute has now confirmed the good mood in the companies. The index of production expectations rose to 27 points in August from 23 points in July, a high value in a long-term comparison. “Apparently the companies are hoping that the supply bottlenecks for preliminary products will slowly resolve in the coming months,” says Ifo expert Klaus Wohlrabe.