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Ifo: German Manufacturers Face Escalating Supply Crunch Amid Geopolitical Tensions

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German manufacturing companies reported a growing shortage of intermediate products, with production expected to be affected as an "alarmingly high" number of businesses grapple with the supply crunch, the ifo Institute said Tuesday.

The percentage of manufacturers facing bottlenecks increased to 15.9% in May from 13.8% in April, led by industries with a high demand for oil- and energy-intensive intermediate products due to the impact of geopolitical tensions.

In particular, 31.2% of chemical businesses reported a materials shortage, while the share of rubber and plastic products makers in the same situation rose to 23.7%. One in four electronics companies saw a supply shortage, while the portion of automotive companies facing supply issues was comparatively low at 10%. Consumer-related industries were largely unaffected.

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