This is a dizzying figure, which says a lot about the unprecedented difficulties that German industrialists are going through: in April, national companies accumulated 4.5 months of order reserves, according to an analysis by the Economic Institute of Munich, the IFO, published on Monday 16 May. Never, in the history of this index, created in 1969, have economists noted such a gulf between incoming orders and deliveries, a reflection of the traffic jam that weighs on the arrival of intermediate products and raw materials in the country, and slows down production.
“It’s an absolute record. We are well above the average value measured over the long term, which is 2.9 months. And, unfortunately, everything suggests that things will continue to deteriorate in the coming months., observes Timo Wollmershäuser, economist at the IFO. According to figures from the institute, 75% of the companies surveyed said they were unable to fulfill their orders as they would like, due to a lack of essential intermediate products. The most affected industries are automotive, machine building and electronics, three key industry sectors.
The reliability of international subcontracting chains, a central element of the competitiveness of “made in Germany” over the past two decades, has been subjected to a new warning shot. Associated with the explosion of energy prices, these disruptions in supply circuits are fueling inflation. The specter of stagflation is increasingly palpable. For German industry, linked like no other to international production chains and traditionally the engine of Europe’s leading economy, the ordeal is formidable.
Construction must be canceled
These difficulties are all the more worrying as they have lasted for more than a year and could continue in the medium term. “It started with microchips, which the automotive industry, the electronics industry and the machine manufacturers missed. These are the first signs of shortage that we have noted, followed by many others., explains Mr. Wollmershäuser. The problems are currently intensifying in the construction sector, one of the most dynamic in the economy across the Rhine in recent years. Wood shortages, in particular, are expected to worsen, as Germany has so far imported a large part of it from Russia. Consequence: construction sites must be canceled for lack of being able to honor orders at the agreed prices.
You have 45.03% of this article left to read. The following is for subscribers only.