Material Shortages Noticeably Better in German Manufacturing

Material shortages in German manufacturing continue to reduce. In January, 12.5% of the companies surveyed reported shortages, down from 18.2% in October. “At the moment, the attacks on commercial shipping in the Red Sea aren’t affecting the supply situation for raw materials and intermediate products,” says Klaus Wohlrabe, Head of Surveys at ifo.

“However, given the length of transport routes, we can’t rule out the possibility that the situation will get worse in the months ahead. The rail strikes in Germany could also lead to bottlenecks for some companies,” Wohlrabe adds.

The industry with the most companies reporting supply bottlenecks was still the automotive sector, although the proportion fell to 26%, down from 36.8% in October. The proportion among manufacturers of electrical equipment and manufacturers of machinery and equipment is 18.9% each. For the majority of industries, the figure is below 10%. Several have virtually no companies reporting shortages: beverage manufacturing (0%), food (1.2%), paper (1.1%), and basic metals manufacturing (1.6%).

Supply problems in the manufacturing sector peaked in December 2021, when 81.9% of companies reported it as an issue.