Material Shortages Ease in German Manufacturing

German manufacturing is seeing fewer material shortages. In June, 31.9% of the companies surveyed reported shortages, down from 35.3% in May. However, this is still much higher than the long-term average of 15.2%. “Unfortunately, the easing does little to counteract the darkening mood in manufacturing,” says Klaus Wohlrabe, Head of Surveys at ifo. “Companies can process their existing orders faster, but they are currently receiving too few new ones.”

Manufacturing remains split in two with regard to supply shortages. More than 50% of companies in the electrical and electronics, machinery and equipment, and automotive industries continue to report problems despite also seeing a decline in shortages.

In the majority of industries, however, the proportion of companies reporting problems with sourcing intermediate products is now back below 20%. These include the chemical industry (12.6%), manufacturers of metal products (15.8%), and furniture manufacturers (8.5%). The situation has eased almost entirely for companies in the paper industry, printing companies, and manufacturers of wood products (except furniture), with fewer than 5% reporting problems.