Disruptions in international supply chains affect the German industry. Industrial production in Germany fell for the third month in a row in June. At the same time, the number of factory orders placed and the delivery times of products continued to increase.
On Friday, it was announced that production in Europe’s largest economy shrank by 1.3 percent in the month of June compared to the previous month, while experts had expected modest growth on average. What matters is that there are shortages of some raw materials because the demand for them has increased very strongly.
Also think of the chip shortage that is afflicting the car industry. In addition, international shipping is experiencing disruptions as a result of the corona pandemic.
According to ING economists, the disappointing production figures explain why the economy of the eastern neighbours performed less than many experts had expected last quarter. But in their expectations, they are not pessimistic about German industry. According to the experts, once the disruptions in the supply chains have been remedied, production at the eastern neighbours could increase sharply.
German factory orders rose further in June, it was revealed on Thursday. However, the increase in orders was mainly due to domestic demand. In addition, the economic recovery is expected to pick up further, despite bottlenecks that put pressure on manufacturers’ supply.
