Difficult Supplies Lead to Sharp Decline in German Factory Orders

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German industry received far fewer new orders in August than a month earlier. This indicates that the material shortages and longer delivery times, which many companies have been struggling with for some time, also have significant consequences for the demand for new products.

 

Demand fell by almost 8 percent, making the decline much more significant than analysts had generally predicted. The supply bottlenecks mainly affected manufacturers of cars and car parts. They saw their orders drop by 12 percent.

German industry has been suffering from supply chain problems for some time. For example, chip shortages hinder the car industry in particular but are filtering through to more and more sectors. Other materials are also scarce or have a longer delivery time due to problems with transport.

In July there was unexpectedly more new work compared to the previous month. The increase was then due to large foreign jobs for German shipyards. Without those large orders, the number of new orders in July would also have declined.

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