German Companies Report Least Material Shortages Since April 2021


Material shortages faced by Germany’s manufacturers continued to ease in February to its lowest level since early 2021, survey data from the ifo institute showed Monday.

In February, 45.4 percent of the companies surveyed reported problems with securing materials, which was the lowest level since April 2021. In January, the figure was 48.4 percent.

“Many companies still can’t ramp up production as desired,” Klaus Wohlrabe, head of surveys at ifo, said.

“Fortunately, however, there are currently no signs that material shortages could worsen again.”

The survey found that more than 70 percent of manufacturers of machinery and equipment, electrical and electronics companies, and automakers faced bottlenecks in raw materials and intermediate products.

The situation continued to ease in the chemical industry, and in energy-intensive industries such as paper, plastics and glass. The share of companies that reported shortages in the latter group was below 20 percent.

The paper industry was one of the least affected, with just 9.1 percent of firms reporting problems.

Last week, the ifo institute reported that its business confidence indicator climbed for the fourth month in a row in February, underpinned by stronger expectations, suggesting the resilience of the biggest euro area economy.

However, official data released later suggested that Germany’s economic contraction at the end of 2022 was more severe than estimated initially, indicating that the economy significantly lost momentum at the end of last year and added to fears of a looming recession in the currency bloc.

In the February monthly report, Bundesbank said the economic output will fall again in the first quarter, but things could slowly pick up again as the year progresses. However, a significant improvement is not expected, the central bank added.

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