BERLIN, Dec 1 (Reuters) – Supply chain problems held back growth in German manufacturing activity for the fourth month running in November, a survey showed on Wednesday, supporting expectations for a weak final quarter for factories in Europe’s largest economy.
IHS Markit’s final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Europe’s largest economy, fell to 57.4 in November, down from 57.8 in October and the lowest in 10 months.
The outlook for the industrial sector has been clouded by shortages of microchips and other intermediate goods as well as raw materials, hitting German car makers particularly hard.
Coupled with rising energy prices, the supply bottlenecks have forced manufacturers to pass the added costs on to consumers, raising fears of an inflation spiral that hurts both consumption and growth.
“While manufacturing output remains subdued, the opposite is true of factory gate prices which continue to sky-rocket, with November seeing the rate of charge inflation hitting a new survey-high,” IHS Markit economist Phil Smith said.
Manufacturing expectations remained robust despite the continued surge in prices and an unusually aggressive fourth wave of COVID-19 infections which is hitting Germany.
“The emergence of the Omicron variant poses more uncertainties, however, including a risk of fresh supply chain disruption,” Smith added.
(Reporting by Michael Nienaber, Editing by Catherine Evans)