German industry still waiting on post-virus boom amid shortages
FRANKFURT: Germany was yet to see any signs of a “post-coronavirus boom”, the head of the influential BDI industry lobby said on Thursday, as persistent supply chain issues weighed on the economy.
Bottlenecks which have plagued manufacturers in Europe’s largest economy through 2021, were set to continue into the new year, the group predicted, with consequences for growth.
Supply disruptions would cost industry “more than €50 billion ($57 billion) in both 2021 and 2022”, BDI head Siegfried Russwurm said in a press conference.
“Despite full order books, a lack of microchips, components and raw materials will continue to affect production for a long time,” Russwurm said.
Germany’s traditionally strong manufacturing sector has suffered particularly badly at the hands of supply shortages caused by the pandemic.
The country’s carmakers have been forced to interrupt production as they contend with a shortage of chips, an important component in both conventional and electric vehicles.
The continued ups and downs of the coronavirus pandemic added to the economy’s woes with German GDP still struggling to reach its pre-crisis level of February 2020.
“The hoped-for post-corona boom is not on the cards,” Russwurm said, while the spread of the more transmissible Omicron variant of the virus posed a new threat were it to lead to significant new restrictions around the world.
“A definitive recovery will be delayed until the summer and that is a rather optimistic scenario,” the lobby boss said, describing the potential for another “stop-go” year of growth.
While the economy was faced with a gamut of different challenges, including rising prices for energy, geopolitical tensions and a shortage of skilled workers, the lobby nonetheless predicted growth of 3.5 per cent in 2022.
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