German industrial production fell for the second month in a row in May, official data showed Wednesday, with bottlenecks in the supply of materials continuing to squeeze output.
Federal statistics agency Destatis said production fell 0.3 per cent month-on-month in Europe’s top economy, after falling by the same amount in April — revised from an initial report of one per cent.
The slowdown follows an almost uninterrupted rise in industrial production since April 2020, after the shock of the first coronavirus wave.
Output was up 17.3 per cent compared with May 2020 but remained five per cent below February 2020 levels, before the pandemic.
‘Supply chain disruptions, like the blockage of the Suez Canal in April or the ongoing semiconductor delivery problems, have not left German industry unscathed,’ said ING bank economist Carsten Brzeski.
Like many countries, export powerhouse Germany is struggling with supply shortages in timber, plastics and steel.
Germany’s crucial car industry has also been hit by a global computer chip crunch caused by a pandemic-fuelled surge in demand for home electronics.
Between January and June 2021, the German car industry saw its second worst half-year since 1991 after national reunification.
‘These figures are not encouraging, but given the shortages, it is not a catastrophe,’ said LBBW bank economist Jens-Oliver Niklasch.
Germany began easing pandemic restrictions in May and has now reopened restaurants, shops, pools and museums, with the number of new Covid-19 cases over a seven-day period falling to around five per 100,000 people.
The government expects the economy to rebound in the second quarter after a 1.8-per cent drop in GDP between January and March, and is predicting 3.5-per cent growth in GDP for the year.
