Supply Bottlenecks Throttle German Industrial Output in April

The Federal Statistics Office said that industrial output dropped 1.0% on the month after a downwardly revised increase of 2.2% in March. A Reuters poll had pointed to an rise of 0.5% in April.

“Such a combination is unparalleled: Order books in industry are well filled and production is falling,” VP Bank economist Thomas Gitzel said, adding that semiconductor supply problems were pushing down output in the car industry.

This means manufacturing will only make a limited contribution to overall economic growth in the second quarter, Gitzel said.

The drop in overall industrial output was driven by a plunge in consumer goods production by more than 3% and a fall in construction activity by more than 4%, the data showed.

The economy ministry said supply bottlenecks for intermediate products such as semiconductors and timber were holding back output. It added that strong business sentiment surveys were suggesting an improvement in coming months.

(Reporting by Michael Nienaber; Editing by Caroline Copley)