Agency Report –
“The control mechanisms and trade restrictions for rare earths are taking their toll,” Klaus Wohlrabe, head of ifo surveys, was quoted as saying in a statement.
“If this trend continues and worsens,” Wohlrabe continued, “it will also have a negative impact on economic growth.”
Earlier this year, Beijing imposed export controls on rare earths and the magnets made from them – which are essential for industry as well as the high-tech and defence sectors – amid ongoing trade tensions with Washington.
Rare earths are 17 metals needed for many modern products such as electric motors or wind turbines. China is the world’s largest producer. The trade restrictions were expanded earlier this month.
Among German manufacturers of electrical equipment surveyed by ifo, 10% said they were facing supply bottlenecks, compared to 5.5% across all industry – comparable to the average seen in pre-pandemic years, according to Wohlrabe.
Perhaps surprisingly, the German car industry, where potential chip shortages are a major concern due to a bottleneck at Dutch supplier Nexperia, has barely been affected so far, according to the survey, with only 1% of firms reporting bottlenecks.
But Wohlrabe noted that most firms had been surveyed at the beginning of the month, adding that November’s figures might paint a different picture.
The figures are still far below those seen during the chip crisis of December 2021, when 81.9% of manufacturers reported facing supply shortages.
