Parts shortages dampen mood among German businesses – KIRO 7 News Seattle

FRANKFURT, Germany – (AP) – The scarcity of computer chips and other raw materials continues to hit German manufacturers, as companies are having difficulties fulfilling orders from a recovering global economy due to bottlenecks.

The frictions in the supply chain caused a closely watched index of German business optimism to fall for the third month in a row in September. The Ifo Institute Index fell from 99.6 points in August to 98.8 points.

“The problems with the procurement of raw materials and inputs are slowing down the German economy,” said the Munich institute on Friday. “The industry is experiencing a bottleneck recession.”

The German economy, the largest in Europe, recovered strongly from the depths of the pandemic shutdowns in the first half of 2020, with gross domestic product recording an increase of 9.4% in the second quarter compared to the same quarter of the previous year.

But big manufacturers like auto companies Daimler, BMW, and Volkswagen are all struggling to get the computer chips they need for today’s cars with electronic features like advanced driver assistance. Other materials that companies need, such as steel, building materials and plastics, are also in short supply.

The truck manufacturer Traton Group, which is majority-owned by Volkswagen, said this week that sales in the third quarter would be “significantly lower than planned” as the company relied on measures such as removing control units from unsold vehicles and installing them Had to resort to vehicles that were made to order.

Traton cited rising COVID-19 cases in Malaysia and the lockdown that followed. Malaysia is an important hub as several chip companies that supply the auto industry have production there, the company said.

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