Material Shortages Noticeably Better in German Manufacturing

German manufacturing is seeing a considerable reduction in material shortages. In October, 18.2% of the companies surveyed reported shortages, down from 24.0% in September. This is a finding from the ifo Institute’s latest survey. “Things are almost back to pre-crisis levels,” says Klaus Wohlrabe, Head of Surveys at ifo. “Companies should plan now for future shortages, diversify their supply chains, and increase inventory levels.”

The industry with the most companies reporting supply bottlenecks was still the automotive sector. However, the share of those doing so fell sharply, from 53.3 to 36.8%. In all other industries, the share is below 30%, and in most cases even below 20%. Among manufacturers of machinery and equipment and manufacturers of electrical equipment, around one in four reported supply bottlenecks. The situation has eased almost entirely in the paper industry (0%), among printing companies (1.1%), and among beverage manufacturers (1.4%).
Supply problems in the manufacturing sector peaked in December 2021, when 82.4% of companies reported it as an issue.