VDMA warns of ‘material shortage burden’ on German industry 

Frankfurt, Germany – Mechanical and plant engineering in Germany is increasingly suffering from material bottlenecks, according to a recent report by the German mechanical engineering industry association (VDMA). 

"Already 70% of the companies in the mechanical engineering sector see their production being made significantly more difficult by a lack of material,” said VDMA 2 Aug, citing a report by the German institute for economic research (Ifo Institute).

While ‘everyone is affected’, VDMA noted that the shortage of materials is hitting the sub-sectors differently. 

The supply of electronic components and steel, for instance, are “particularly problematic,” it added. 

The recent Ifo Institute figure is substantially above the previous survey in April, when more than 40% of the participants from the mechanical engineering sector reported shortages in the supply of materials. 

The latest data also confirm’s VDMA survey in April, in which around every fourth company saw increasing tension in the supply chain within the next three months. 

"This tightening was - unfortunately! - to be expected," said VDMA chief economist Dr Ralph Wiechers. 

The poor supply situation may also be a reason for the less “euphoric mood” among entrepreneurs, said Wiechers, after nine consecutive months of increase, the Ifo business climate in mechanical engineering failed to increase in July. 

The reason, Wiechers explained, is “a decline in optimism” with the current outlook.

"The scarcity of raw materials is dampening the companies’ production plans,” he said. 

In addition, increasing numbers of infections in many markets that are important for mechanical engineering are putting the supply chains under further pressure, Wiechers added.

Despite the challenges, VDMA said confirmed its overall forecast of 10% growth in production for the year.