German factories remain 5.6% below pre-pandemic levels
Germany saw its industrial output fall in April due to a lack of semiconductors, timber and other intermediate goods.
It is additional evidence that supply bottlenecks are holding back a recovery in the largest economy in Europe.
The Federal Statistics Office confirmed industrial output fell by 1% on the month following a downwardly revised increase of 2.2% in March.
The dip in the industrial output figure was driven by a 3% fall in consumer goods production and a sharper fall of 4% in construction activity.
The figures mean that the German economy will be more reliant on household spending to support its economy which is still reeling in the aftermath of the coronavirus crisis.
German factories remain 5.6% below pre-pandemic levels, despite the global economy beginning to pick up this year.
Factory bosses have been drawing attention to shortages in plastics, rubber and metals and semiconductors, as suppliers have raised prices in response.
“Such a combination is unparalleled: Order books in industry are well filled and production is falling,” VP Bank economist Thomas Gitzel said, adding that the supply problems with semiconductors were causing a fall in output in the car industry.
Gritzel said that manufacturing would only be able to make a minimal contribution to the overall picture in the coming quarter, despite order books being full.
Bosch board member Harald Krüger told the Financial Times: “The only way to get out of [the recent crisis] is to have a different level of commitment”.
In an effort to ensure production of chips for its power tools in July, Bosch opened a €1bn semiconductor plant in Dresden yesterday.
“Money needs to be put on the table and actually parts have to be bought. The commitment needs to be rock solid that those parts will be bought. It can’t be: ‘Maybe I [will] buy them, prepare for it, and maybe not.’ This doesn’t work.”
