German industrial production drops in September due to shortages in the supply chain | The powerful 790 KFGO

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BERLIN (Reuters) – German industrial production fell unexpectedly in September, official data showed on Friday, as bottlenecks in the supply of raw materials and preliminary continued to weigh on output of the largest economy of Europe.

The Federal Statistical Office said industrial production fell 1.1% on the month after a revised upward 3.5% drop in August. A Reuters poll showed a 1% increase in September.

Compared with the previous quarter, production in the manufacturing sector fell by 2.4% in the third quarter and is currently 9.5% lower than in February 2020, before the start of measures to combat the coronavirus pandemic in Germany.

The drop in September was due to a drop in production in the mechanical construction, electrical equipment and computer equipment sectors, the economy ministry said.

“The long-standing bottlenecks in the supply of raw materials and intermediates are reflected on a broader front,” the ministry said.

Thomas Gitzel, an economist at VP Bank, said Germany’s industrial production outlook was bleak, with companies expecting material shortages to persist until the end of next year.

Rising gas and electricity prices are additional negative factors that will weigh on production, he said.

“The coming quarters will remain difficult,” Gitzel said, adding that Germany’s economic output would stagnate in the fourth quarter.

“But it is also clear that when the flow of materials is operational again, the current situation will turn into its opposite,” he said.

(Reporting by Riham Alkousaa; Editing by Alex Richardson)


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