The German auto industry, which accounts for 14% of global industrial production, has been hit particularly hard by the disruption in the supply chain, as giants like Volkswagen and BMW cut production in anticipation of semiconductors .
The association of German automakers VDA, meanwhile, reported that production fell to 250,000 in May, down by a third since March and to the lowest since April 2020 during the first lockdown.
Ralph Solveen, Senior Economist at Commerzbank, said: “Figures already available for the auto sector suggest a further minus in May, at least for manufacturing, so that in the second quarter the industry will not contribute anything to the growth of the German economy despite strong demand. “
Timber is also scarce due to the surge in demand after the lockdown, leading to higher prices and bottlenecks in production.
Christian Fuertjes, economist at HSBC, said: “The recovery of the German economy could be hampered by a lagging manufacturing sector for the time being, although demand remains strong.
“In addition, the resulting shortage of German manufactured goods could also cause additional inflationary pressures in Germany and the euro area.”
Industrial production figures for March have also been revised downwards. Carsten Brzeski, analyst at ING, said: “The rebound in the German economy, and also in the euro area, in the second quarter started with shaky knees.”