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German engineering firms expect hit from supply chain bottlenecks next year By Reuters


© Reuters. FILE PHOTO. A fully-automatic process is used to adjust a windshield on a Mercedes Benz A-class model at the Daimler factory, Rastatt (Germany), February 4, 2019. REUTERS/Kai Pfaffenba

BERLIN (Reuters) – The majority of German mechanical engineering companies are facing noticeable or serious supply chain problems, a survey by Germany’s VDMA engineering industry association showed, with production growth expected to be affected next year.

VDMA revealed that 81% reported an impairment in their supply chains on Thursday, with a particular focus on electronic components. Additionally, two-thirds of companies were experiencing problems with logistics or transport.

Ralph Wiechers (VDMA Chief Economist) stated, “That’s significantly more than it was at the height of the pandemic mid-April 2020.”

According to the survey, more than half of companies expect that preliminary production bottlenecks will remain unchanged, and 40% believe it will increase. The engineering industry association added that a easing trend was unlikely for the next three months.

VDMA maintained its 2021 production growth forecast at 10%. However, it said that output will be lower next year with a growth projection of 5%.

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