Situation in the German Automotive Industry Is Uncertain
It is unclear how the situation for German automotive manufacturers will develop in view of the conflict in Ukraine. “Our latest data doesn’t yet reflect the most recent escalation in Ukraine,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. “BMW and VW plants are at a standstill because there is now a shortage of wiring harnesses due to the Ukraine war.” Most recently, the ifo indicator for the entire industry rose to plus 18.3 points in February, up from plus 7.4 points in January.
Automakers’ price expectations rose sharply, with the balance jumping to 76.7 points, up from 21.3 points in January. All automakers are reporting a shortage of intermediate products. The current situation in Ukraine has greatly exacerbated this shortage. This means manufacturers’ order books are still full and cannot be processed. The balance here rose to 50.6 points, up from 39.3 points in January. Despite a decline in production, automakers are looking to recruit new staff. “As a result of structural change in the automotive industry, IT professionals are now more sought after than engineers,” Falck says.
This survey was completed in mid-February, before the escalation in the Ukraine conflict.
