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German business optimistic, but supply chain troubles weigh

German companies are increasingly optimistic about their operations in China and North America, a survey issued on Tuesday by the German Chambers of Commerce found, but they took a dimmer view of their prospects in eastern Europe and South America.

Overall, companies based in Europe’s largest economy have a greatly improved view of how business is going, the survey found, with 45% saying it was going well and only 14% saying it was going badly. Just over half expect business conditions to improve over the next 12 months.

The main tailwind is coming from problems in the supply chain: 40% of internationally active companies report problems obtaining components, a 9 percentage-point rise from last autumn.

“Over recent months, production outages and problems with shipping and a shortage of containers has led to disruptions in world trade,” the Chambers of Commerce said. “That has raised transport costs and lengthened delivery times.”

Some 71% of companies were planning changes to their supply chains in order to tackle this problem, the survey found.
Source: Reuters (Reporting by Christian Kraemer; Writing by Thomas Escritt; Editing by Hugh Lawson)

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