German machinery industry cautiously optimistic about easing supply problems

FRANKFURT, Germany—Only 2 percent of plastics and rubber industry respondents within Germany's mechanical and plant engineering sector experienced "serious" supply chain problems in March, a VDMA poll has found.

This compared to 14 percent of respondents who recorded delivery bottlenecks at a "medium" level, 44 percent at a "low" level and 40 percent who reported no problems, according to the flash survey carried out March 21-24.

Across all surveyed sectors—also including chemicals, electrical and electronics, and metals/metal products—supply chain impairments were rated as "serious" by 13 percent of respondents, compared to 32 percent a year earlier.

Of the 639 survey participants, those reporting supply chain problems at medium or low levels came in at 44 percent and 35 percent, respectively, by March 24, compared to 42 percent and 15 percent a year ago.

But, while the overall supply chain situation appears to be "gradually brightening," there remain "serious bottlenecks in the supply of electronic components," VDMA noted.

Despite this, and continuing cost pressures, most companies in Germany's mechanical and plant engineering sector were "cautiously optimistic" about 2023.

With the improved outlook, 60 percent of VDMA member companies in the mechanical and plant engineering sector aim to expand their core workforce in the current year.

Against this, however, around three out of four companies reported noticeable or serious shortages of skilled workers.

"We are dealing here with a profound structural change that requires a high degree of flexibility and the efficient deployment of employees," said Rich Wiechers, VDMA chief economist.

Indeed, VDMA added, issues around skills shortages and demographics are rated as the biggest of among nine key challenges facing the mechanical and plant engineering sector.

Meanwhile, the supply of energy to companies in Germany's mechanical and plant engineering sector "has also become more relaxed and, above all, more reliable."