Prices and lack of materials have hit the German economy extremely hard

Exploding raw material and component prices, rising transport costs as well as supply chain problems are causing current problems for almost every company, which may ultimately be reflected in final prices for consumers. According to Euler Hermes' analysis, this unprecedented situation has hit the German economy extremely hard. The current economic recovery after the deep recession in 2020 has caused companies around the world to build up stocks. However, according to Euler Hermes, which operates in the field of receivables insurance and is part of the Allianz Group, German companies often pull for a shorter end in an environment of insufficient supply. "The US has an advantage in the goods race, one of the reasons is the earlier opening of the economy," said Ron Hof, head of Euler Hermes for Germany, Austria and Switzerland. The economy in the USA began to recover this year much earlier and more significantly than in Europe. One of the consequences is also that deliveries of goods from China to the USA, according to the study, increased by 30% and to Europe by only 10%. This is causing major problems for German industry. For example, while demand for German machinery is rising sharply after the corona crisis in 2020, materials are often lacking for companies to process orders. According to a recently published study by the Munich Ifo institute, 64% of German companies are already complaining that a shortage of raw materials and components and problems with their supply are hampering their production. This means that the recovery of the German economy must currently rely only on consumers, as problems of material shortages are likely to hamper industrial production in the foreseeable future.