German industry suffered a sharp drop in production in August. Total production fell by 4.0 percent compared to the previous month, as the Federal Statistical Office announced on Thursday in Wiesbaden. This is the sharpest decline since the slump during the first Corona wave in spring 2020. It was also much stronger than analysts had expected. Order numbers had already disappointed on Wednesday and showed how severely the industry is currently suffering from the many bottlenecks in international trade in goods.
Compared to the same month last year, production increased by 1.7 percent, but the expectations of experts were clearly missed here as well. Compared to February 2020, the month before the corona crisis attacked Germany, total production is 9.0 percent lower. “The supply bottlenecks for raw materials and preliminary products turned out to be more serious than previously assumed,” commented the Federal Ministry of Economics in Berlin. The reasons for the bottlenecks are, among other things, the aftermath of the Corona crisis.
Fear of “bottleneck recession”
The slump was broad and affected almost all sectors. The production of goods in industry fell by 4.7 percent. The production of investment goods such as machines decreased particularly significantly. Activity in construction fell by 3.1 percent. Only the energy production was higher than in July.
The analysis company Capital Economics spoke of growing fears of a “bottleneck recession”, ie an economic slump as a result of bottlenecks on the supply side. Car production and mechanical engineering are particularly hard hit. Commerzbank analyst Ralph Solveen assumes that no noticeable relaxation of the material shortage is to be expected in the coming months. Therefore, the industry is likely to continue to slow the German economy. (dpa / mer)
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