BERLIN, (Reuters) – Supply shortages hampered German manufacturing growth for the third straight month of October, according to a poll released Tuesday.

IHS Markit’s Final PMI for Manufacturing (IHS Markit) reached 57.8, slightly below the initial Flash reading of 58.1. In September, the index was at 58.4.

Lack of raw material and semiconductor supplies has clouded the outlook for factories, particularly in Germany.

Due to rising energy prices and shortages, manufacturers have had to pass on the additional costs to their customers, causing concerns about an inflation spiral, which could dampen both growth and cosumption.

Phil Smith, IHS Markit’s Economics Associate Director said, “Accordingly, surveyed businesses say that the slowdown in auto production is dragging down other areas of the manufacturing sector with it,”.

“Worryingly,” he stated, “The supply problems have taken a turn worse in October. Lead times for purchases are increasing to the highest extent in three months.” He also said cost inflation is climbing towards the record levels seen last summer.

He stated that manufacturers had lost confidence in the resolution of these problems sooner than expected, and business expectations are now at their lowest level since August 2020.