There were tentative signs of supply constraints easing last month but the bottlenecks that are persisting continue to hold back manufacturing output and growth conditions for the most part. Markit notes that:
“After a promising start to 2021, the German manufacturing
sector’s performance faded as the year went on as
unprecedented supply chain constraints took their toll.
However, although growth in December was only modest with
supply shortages still an issue, the survey’s output index has
now ticked up in each of the last two months, to offer some
hope that the final quarter of 2021 can be a turning point from
which growth starts to pick up as we move through 2022.
“Buoyed by full order books, German manufacturers are
confident about growth prospects in the coming year, though
much still depends on an improvement in the supply situation.
“Latest data provided some signs of encouragement, as
expectations improved, the incidence of lengthening lead
times eased to an 11-month low, and firms were able to
rapidly build up stocks of inputs. Nevertheless, supply chains
remain under intense pressure by historical standards, and
there’s still a risk of fresh disruption as a result of flare-ups in