German Manufacturing Supply Crisis Deepens, Hits 14.2 Percent in May

(MENAFN) Supply chain pressures gripping German manufacturing intensified sharply in May, with procurement bottlenecks spreading across key industrial sectors as geopolitical instability continues to strangle the flow of critical materials into Europe's largest economy, the Institute for Economic Research (Ifo) warned Tuesday.

The Munich-based Ifo institute revealed that 14.2% of surveyed manufacturers reported shortages in raw materials and intermediate goods last month — up from 13.8% in April and nearly triple the 5.8% recorded as recently as January, a trajectory that signals accelerating deterioration rather than stabilization.

The institute pointed directly to two compounding forces: the prolonged conflict in the Middle East and tightening security restrictions on maritime shipping through critical global trade corridors, both of which continue to sever the reliable delivery of industrial components that German factories depend on.

The chemical sector is bearing the heaviest burden, with 31.1% of operations reporting critical material shortages — a level severe enough to push several firms to announce production cutbacks in the months ahead. Rubber and plastic manufacturers followed at 22.9%, while 17.2% of electrical equipment producers reported serious delivery delays.

Mechanical engineering — a cornerstone of German industrial output — saw its share of affected firms climb to 14.8%. The automotive sector, meanwhile, flagged renewed procurement difficulties for specialized electronic components, raising fresh concerns for an industry still recovering from years of supply disruptions.

Ifo concluded that the data lays bare a structural vulnerability at the heart of German industry: its output remains acutely exposed to global raw material availability and the safety of international shipping lanes — two factors increasingly beyond Berlin's control.

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