GERMAN ECONOMY
Supply bottlenecks cost industry almost EUR 64 bn in added value, up to mid-2022 / Automotive industry particularly hard hit
 Well-stocked storage facility: something many producers had trouble achieving for a while (Photo: Pexels/tiger lily) |
The lack of intermediate products from abroad meant that the German industry was unable to produce goods worth almost EUR 64 bn from the start of 2021 to mid-2022, according to a new study conducted by the Macroeconomic Policy Institute (IMK) of the Hans Böckler Foundation (Düsseldorf, Germany; www.boeckler.de).
The analysts report that the automotive industry has been particularly hard hit, suffering a EUR 31 bn drop in added value despite receiving orders in abundance. In the automotive sector, the loss of added value is likely to exceed the value of the missing components – frequently semiconductors – by a factor of around 10, according to calculations by IMK experts Thomas Theobald and Peter Hohlfeld. Despite the bottlenecks, car manufacturers in particular have been able to achieve high profits, since they have concentrated on the production of more expensive vehicles with higher profit margins and have been able to push through higher prices.
Related: Chip issues cost European automotive industry billions
All the same, Germany’s GDP would have been 1.2% higher at the end of 2021 and 1.5% higher midway through 2022 if the domestic industry had been able to process all the new orders it had received at the start of 2021. The economic recovery after the end of Covid restrictions was therefore much weaker than it would have been, had there been no delivery bottlenecks.
“These figures underline the need to attach greater importance to the resilience of supply chains in the future at the expense of cost efficiency,” the researchers write. In their study, the economists compare the actual gross added value, as recorded by the German federal statistical office Destatis (Wiesbaden; www.destatis.de), with an estimated scenario without any bottlenecks for input products.
The study conducted by the Hans Böckler Foundation does not specify whether the added value losses are permanent or temporary. The fact that the volume of orders remains high suggests they are only temporary. However, the increasingly difficult economic situation resulting from the Ukraine war is also increasing the risk of at least some of the orders that have not yet been processed being cancelled, IMK researchers say.
Related: Business outlook in Germany worst on record
The analysts report that the automotive industry has been particularly hard hit, suffering a EUR 31 bn drop in added value despite receiving orders in abundance. In the automotive sector, the loss of added value is likely to exceed the value of the missing components – frequently semiconductors – by a factor of around 10, according to calculations by IMK experts Thomas Theobald and Peter Hohlfeld. Despite the bottlenecks, car manufacturers in particular have been able to achieve high profits, since they have concentrated on the production of more expensive vehicles with higher profit margins and have been able to push through higher prices.
Related: Chip issues cost European automotive industry billions
All the same, Germany’s GDP would have been 1.2% higher at the end of 2021 and 1.5% higher midway through 2022 if the domestic industry had been able to process all the new orders it had received at the start of 2021. The economic recovery after the end of Covid restrictions was therefore much weaker than it would have been, had there been no delivery bottlenecks.
“These figures underline the need to attach greater importance to the resilience of supply chains in the future at the expense of cost efficiency,” the researchers write. In their study, the economists compare the actual gross added value, as recorded by the German federal statistical office Destatis (Wiesbaden; www.destatis.de), with an estimated scenario without any bottlenecks for input products.
The study conducted by the Hans Böckler Foundation does not specify whether the added value losses are permanent or temporary. The fact that the volume of orders remains high suggests they are only temporary. However, the increasingly difficult economic situation resulting from the Ukraine war is also increasing the risk of at least some of the orders that have not yet been processed being cancelled, IMK researchers say.
Related: Business outlook in Germany worst on record
09.12.2022 Plasteurope.com [251663-0]
Published on 09.12.2022
German version of this article...