BERLIN (Reuters), – German production was held back by supply bottlenecks in the third quarter of 2018, data from Friday.

The Federal Statistics Office reported that Europe’s largest economy increased by 1.8% in quarter-on-quarter adjusted terms. This was below the 2.2% forecast in a Reuters poll.

2.9% growth was reported in the 2nd quarter, compared to 1.6%. The economy still remains at 1.1% of its pre-pandemic levels.

Some manufacturers are having difficulty producing full-scale production because of shortages in supply. Rising energy prices and consumer prices have also pushed up prices. This raises concerns about weakening growth, especially as winter draws near.

The economy will likely continue to grow as the pent-up demand for sectors such as gastronomy and tourism, which were closed for several months due to the pandemic, is met by the sector.

Fritzi Kohler Geib from KfW bank stated that 1.8% of the quarterly growth was due to strong activity during summer months in the services industry.

She wrote that the “stinking material bottlenecks” which had limited the sector of production in particular would not have prevented the economic growth to be even greater. Unfortunately, supply-side distortions are likely to get worse next year.