Latest data released by Markit/BME - 2 November 2021
The preliminary report can be found here. Much like the French report, supply chain issues are plaguing German manufacturing activity as material shortages weighed heavily on output and new orders last month.
Just be wary that the lengthening in suppliers' delivery times is helping to flatter the headline reading, so there's that to consider when viewing underlying conditions. The output index is the lowest in 16 months while firms are looking to pass on the increase in cost pressures to customers, something which will weigh more on the outlook.
Markit notes that:
"Output levels across the manufacturing sector are being increasingly shackled by supply bottlenecks. According to surveyed businesses, the well-documented slowdown in autos production is dragging down other parts of the manufacturing economy with it, as firms in that sector scale back orders for components and materials.
"However, while producers of intermediate goods have recorded a sustained drop in new orders, we're still seeing some pockets of robust strength in demand, particularly for investment goods. Backlogs continued to rise across each of the main industrial groupings, suggesting this is still mainly a supply-side issue.
"Worryingly, the supply problems took a turn for the worse in October, with lead times on purchases lengthening to the greatest extent for three months. Adding to this, the rate of cost inflation has crept back up towards the record highs seen in the summer, leading to an unprecedented rise in factory gate prices and putting more inflationary pressure into the system.
"Manufacturers lost further confidence that these issues will be resolved sooner rather than later, with business expectations now at their lowest since August 2020."
