German Industry is More Affected by Chip Shortage

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Chip shortages are expected to increase further and cause more significant problems for the German industry. The chief economist of the German central bank expresses this expectation.


Jens Ulbrich adds that this obstacle could slow down the economic recovery of Europe’s largest economy.

Shortages of semiconductors and other industrial components have already caused plant shutdowns, particularly in the automotive industry.

However, manufacturers of other devices such as consumer electronics are also starting to notice the shortages. After the second quarter, the situation should stabilize, Ulbrich thinks.

He finds it difficult to indicate how significant the impact of the chip shortage is. “We see clear signs of a slowdown in car production in the first quarter, but it is not possible to say how much of that is due to the chip effect,” explains Ulbrich.

“There are several overlapping factors.” He also points to the effects of Brexit, which brought demand from Great Britain to the fourth quarter, and the end of reduced VAT rates in Germany.

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