Economic Buzz: Supply Bottlenecks Continue To Hold Back German Factory Growth In December

3 Jan 2022 , 04:05 PM

German manufacturing production continued to be held back by supply constraints in December, latest PMI survey data showed. At 57.4 in December, the headline IHS Markit/BME Germany Manufacturing PMI – a weighted aggregate of measures of new orders, output, employment, suppliers delivery times and stock of purchases – was unchanged since November and remained at its lowest since January 2021. However, with firms recording the lowest incidence of input delivery delays since January 2021, the rate of output growth picked up slightly. This coincided with a partial correction in the rate of cost inflation from recent record highs as well as an improvement in expectations towards future production. Still, conditions on the supply side remained among the toughest seen in the surveys history, leading firms to rapidly build up buffer stocks of inputs during the month. After having slowed throughout much last year, the rate of manufacturing output growth picked up slightly for the second month in a row in December. That said, it was still subdued compared to the historical average, as a number of firms once again indicated that supply shortages had weighed on output levels.

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