Material Shortages Worsen Somewhat in German Manufacturing

Material shortages in German manufacturing have become slightly worse. In February, 14.6% of the companies surveyed reported shortages, up from 12.5% in January. These are findings from the ifo Institute’s latest survey. “In addition to the ongoing conflict in the Red Sea, the rail strike in Germany has also led to a shortage of raw materials and intermediate products at some companies,” says Klaus Wohlrabe, Head of Surveys at ifo. “Nevertheless, the supply bottlenecks are not a fundamental problem for industrial production. At present, we’re mainly seeing delays within supply chains, not a total breakdown.”

Nonetheless, the chemical industry reported a significant increase in supply bottlenecks for intermediate products. The share of companies there with this complaint shot up from 8.3% to 21.5%. Other industries above 20% were the leather industry (57.9%), manufacturers of electrical equipment (21.9%), and car manufacturers (21.8%). Several industries continue to have virtually no companies reporting shortages: beverage manufacturing (1.4%), food (2.4%), clothing (1.5%), paper (2.2%), and glass and ceramics (2.2%).

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