First China, now Germany. The script of post-Covid recovery keep giving surprises. It was assumed that after the Covid-19 it would be the workshops of the world that would restart, starting with the Asian giant and the powerful manufacturing engine of Europe. In reverse, PMI indices signal that China is below 50, the boundary between expansion and recession. This morning, however, the statistics confirm that German industrial production fell well beyond expectations in August due to the supply problems: -4,0% from +1,3% in July. Estimates were for a decline of 0,4%.
Meanwhile, another surprise, the tip of the iceberg of the crisis is the car industry, which travels on numbers a good third lower than the pre-crisis values. In short, the famous "bottlenecks", i.e. the intermittent supplies of raw materials and semi-finished products, have upset the recovery charts. And if China's problems are largely linked to the infrastructure crisis, German industry, terminal of a sophisticated production system, suffers from the difficulties of "just in time" more than others. With evasive effects for a country whose economy lives for half of the import/export of cars, machine tools and other industrial goods. With paradoxical effects: at Traton, Volkswagen's truck subsidiary, it was decided to disassemble the machines already produced but not yet sold in order to obtain the components to be allocated to the vehicles already assigned to customers. And in the planet Stellantis, which also suffers from problems of scarcity affecting the plants in Italy, France and the United States, the most painful point concerns the former Opel factory in Eisenach: work will only resume at the end of the year.
It is no coincidence that in the classifications of the recovery in first place figure Polish industry, supplier of semi-finished products, less affected than the others by the hunger for chips which is holding back the most sophisticated productions. In reverse, France suffers: the aeronautical industry, probably the most dependent on electronic supplies, represents 12% of the transalpine industrial production.
In this picture Italy is placed in the middle of the ford. The recovery, so far more brilliant than its cousins, was supported by the export trend, thanks above all to the contribution of the agri-food boom (+23% in August), but also to the awakening of the domestic market, which favored a strong recovery (+11,4%) of industrial production. Of course, the effects of the crisis, especially on the energy front, are now closely threatening our manufacturing as well.
The alarm on the fate of natural gas, partially returned after the reassurances of Vladimir Putin, closely affects the fate of the most energy-intensive sectors: chemicals, cements, foundries and all the capitals of top productions of made in Italy: the factories of ceramics, glass and paper. Sectors of weight for the entire Italian economy, with exports accounting for up to 65% of their turnover. In short, it is not just a matter of scarcity, but of costs as the president of Federacciai Alessandro Banzato pointed out at the annual meeting of entrepreneurs: "If the growth in prices continues as in the last period, it is a matter of days to evaluate whether and how stop the plants due to the excessive level of production costs". Or whether to proceed with the creation of checkerboard blocks for electric ovens that buy electricity avoiding peak times.
The rise of production costs and the scarcity effect confront central banks with an almost unprecedented situation in the last fifty years: rising inflation is not the result of an increase in demand, as feared, but of a offer shock. In other words, the increase in interest rates, effective medicine in the face of a boom in wages and consumption, risks damaging even more the production machine as well as damaging consumption. It is no coincidence that the US is running for cover on the energy front by opening the coffers of strategic reserves, while Spain has made a rapid about-turn on the taxes imposed on the "excess profits" of electricity companies. The therapy has already paid off: profit taking on oil and gas has taken off. Natural gas futures fell 3%, extending -10% on Wednesday. Unfortunately, however, it will be much more difficult in the short term to get the chips that European industries lack.
