Procurement Bottlenecks Could Slow Recovery in German Manufacturing
Scarcity of intermediate products has become a serious problem for German manufacturing. Of the industrial companies surveyed by the ifo Institute in April, 45 percent reported bottlenecks. This is by far the highest value since January 1991. The figure was only 18.1 percent in January 2021, compared with just 7.5 percent in October 2020. “This new bottleneck could jeopardize the recovery of the manufacturing sector,” says Klaus Wohlrabe, Head of Surveys at ifo.
At 71.2 percent, manufacturers of rubber and plastic goods are especially hard-hit by material shortages. They are followed by automakers and their suppliers at 64.7 percent, manufacturers of electrical equipment at 63.3 percent, computer manufacturers at 57.6 percent, furniture makers at 56.9 percent, and manufacturers of wood, straw, and plaiting material articles at 53.3 percent.
Meanwhile, other industries were hardly affected by the problem: according to ifo, only 9.1 percent of pharmaceutical companies and just 1.6 percent of beverage manufacturers were hit by material shortages.
The ifo Institute asks about intermediate products every three months. At the end of March, the container ship Ever Given became wedged in the Suez Canal, blocking imports from Asia for several days. In addition, computer chips and wood, for example, are currently in short supply.
