THE engine of the German economy is turning into a brake in the face of a global supply crunch, threatening to derail the nation’s recovery.

While its strong focus on manufacturing helped Europe’s largest economy fare better than its more service-heavy peers in the region during COVID lockdowns, Germany’s rebound is now at risk as companies report shortages of materials ranging from memory chips to lower-tech parts and even basics such as wooden pallets.

Pandemic jolts to economies everywhere are throttling even a Germany Inc. brand built on efficiency and a reputation for precision and durability. The supply problems are wreaking havoc on companies from Siemens AG to BMW AG, and they could persist into next year or even longer.

“In my career we haven’t had a situation with so many commodities being scarce at the same time, and I’ve been dealing with the same materials since 1996,” said Thomas Nuernberger, managing director of sales at Mulfingen, Germany-based EBM Papst, a maker of industrial fans. “This is the most difficult situation in the global supply chain I’ve witnessed.”

Siemens CEO Roland Busch earlier this month warned that risks including the global semiconductor shortage, along with rising raw-material and freight costs, pose headwinds that are “likely to prevail into fiscal 2022.”

Nuernberger sees the disruptions dragging on, too. “I count on growth being delayed until 2023, because even in 2022 we will still have problems with semiconductors” and the container shipping turmoil “will also last well into 2022,” he said in an interview.

Such concerns add to a warning from Germany’s central bank, which said last week that growth this year may fall short of the 3.7 percent it forecast in June, partly due to the supply problems.

According to Bloomberg Economics, German factories were still operating around 7 percent below their pre-pandemic level as of June, with automakers and machinery manufacturers particularly lagging behind.

(SD-Agencies)