German factories are 5.6% below pre-pandemic levels
Industrial production fell in April due to a shortage of semiconductors, wood and other intermediate goods.
It is additional evidence that supply bottlenecks are hampering recovery in Europe’s largest economy.
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The Federal Statistics Office confirmed that industrial output fell by 1% that month after a 2.2% downward revision in March increased by 2.2%.
The flooding of industrial output figures was driven by a 3% decline in consumer goods production and a sharp decline of 4%.
The numbers mean that the German economy will depend on household spending to support an economy that is still upset in the aftermath of the coronavirus crisis.
German factories are 5.6% below pre-pandemic levels, despite the global economy beginning to recover this year.
Factory bosses have been paying attention to the shortages of plastic, rubber, metals and semiconductors as suppliers increase prices accordingly.
“This combination is unparalleled. Industry orders are well filled and production is declining,” said Thomas Gitzel, an assistant bank economist, who said the issue of semiconductor supply issues was the automobile. He added that it is causing a decline in production in the industry.
Gritzel said manufacturing could make minimal contributions to the full picture of the upcoming quarter, despite the orders being filled.
Harald Krüger, a member of the Board of Directors of Bosch, told the Financial Times: “The only way to get out of (the recent crisis) is to have a different level of commitment.”
In July, Bosch opened a 1 billion euro semiconductor factory in Dresden yesterday to ensure production of power tool chips.
“You have to put the money on the table and you have to actually buy parts. The commitment should be solid, these parts are purchased. That’s not possible: “Maybe I’m buying them And prepare it, and maybe not.” This doesn’t work. ”
