German engineering body scraps 2022 outlook – report

BERLIN (Reuters) – Germany’s main engineering industry association has scrapped its 2022 production forecast, saying even a reduced estimate it made in March would no longer be met, according to a media report.

Inflation, COVID lockdowns in China and supply chain disruptions were compounding a broader economic slowdown, VDMA President Karl Haeusgen told the Welt am Sonntag newspaper in an interview for the paper’s Saturday edition.

The association, which has over 3,400 members, initially predicted 2022 growth of 7%, before cutting that to 4% in March.

“But even that can no longer be sustained,” Haeusgen was quoted as saying. He did not give a new forecast.

“Above all, we are impacted by material shortages,” he said.

“The companies are short of semiconductors and a number of other electronic components, but the situation is also coming to a head again for metals and plastics,” he said, adding this was fuelled more by Chinese lockdowns than Russia’s war on Ukraine.

German engineers are also greatly concerned by the impact a possible halt on Russian gas imports would have on business, according to Haeusgen, who told the newspaper that a gas embargo “would place further stress on supply chains meaning that many parts would suddenly no longer be available”.

(Reporting by Rachel More; Editing by Mark Potter)