Supply chain challenges are re-emerging for manufacturers of electrical equipment, according to a recent survey by the Ifo Institute. The survey, released Wednesday, indicates a significant increase in material shortages, with 12.7% of companies reporting difficulties – a sharp rise from just 5.7% in April.
Klaus Wohlrabe, head of Ifo’s surveys, suggested that the increased bottlenecks are likely a consequence of Chinese export and trade restrictions on specific rare earth elements. He cautioned that a continuation and escalation of these restrictions could potentially impact other key sectors including machinery and automotive production.
While electrical equipment manufacturers are experiencing the most acute issues, similar levels of material scarcity were also observed in the production of wood products (excluding furniture), with 12.0% of firms reporting shortages. The overall industrial landscape shows 5.8% of companies currently facing supply problems, up from 4.1% in April, though still considerably below the historical average of 15.0%.
The impact is beginning to ripple outwards. The automotive sector has seen a marked increase, rising from 0.9% to 7.1% in reported material difficulties. In contrast, the machinery sector has remained largely unaffected, with a slight decrease from 4.9% to 4.6%.
The situation represents a notable shift from the peak of supply chain disruptions experienced in December 2021, when a substantial 81.9% of industrial companies reported material shortages.
