Expert: Middle East Conflict Impacts German Manufacturing

Phil Smith, Deputy Director of Economics at S&P Global Market Intelligence, highlighted the significant impact of the Middle East conflict on German manufacturing in March's PMI results. According to Jin10, the most notable effect was the sharp rise in input cost inflation due to soaring oil and gas prices, marking the largest monthly increase on record. Supply chain pressures are becoming evident, with the longest delivery times for inputs since mid-2022. Manufacturers have lowered their growth expectations for the coming year, anticipating that heightened uncertainty and strong inflationary pressures will eventually hinder demand and production. The extent of these impacts largely depends on the duration of the Middle East conflict.