The shortage of materials in German industry is noticeably decreasing, according to the results of a survey by the Ifo Institute. The situation in the automotive industry and in the data processing equipment segment remains difficult.
The shortage of materials in German industry has recently decreased significantly. The Munich Ifo Institute announced today that only 18.2 percent of companies reported bottlenecks in October. In September it was still 24 percent. The peak of delivery problems was recorded in December 2021 as a result of interrupted supply chains due to the corona pandemic, when 82.4 percent of companies complained about this.
This means that “the pre-crisis level is no longer far away,” explained Klaus Wohlrabe, head of surveys at the research institute. Companies should now “prepare for future bottlenecks, diversify supply chains and increase inventory,” he advised.
Automotive manufacturing is still very affected
However, the situation differs significantly in the individual sectors. In the automotive industry, most companies continue to report delivery bottlenecks, although the corresponding proportion in October rose to 36.8 percent from 53.3 in September. “In all other sectors the value is below 30 percent, usually even below 20 percent,” according to the ifo Institute.
In mechanical engineering and electrical equipment manufacturers, around one in four companies reported delivery bottlenecks. In the data processing equipment sector, the rate is 29.9 percent. The paper industry (0 percent) and the manufacturers of printed matter (1.1) and beverages (1.4 percent) are almost worry-free.
Is the economy continuing to shrink?
Despite better supplies, German industry is in crisis. It has cut production in three of the past four months after the order situation recently deteriorated. High interest rates and the global economic downturn are currently dampening demand for goods “Made in Germany”. In addition, the industry is faced with high energy costs, which the federal government now wants to combat with the electricity price package it has just approved, which promises billions in relief.
The German economy shrank in the third quarter: According to the Federal Statistical Office, the gross domestic product (GDP) fell by 0.1 percent from July to September. Economists are hoping for 2024, but there are also skeptical voices. The economists at Commerzbank assume that the German economy will continue to shrink in the coming year. The bank is therefore significantly more pessimistic than the economists and the federal government.