Some manufacturers were even forced to halt production, increasing costs and disrupting supply chains.Īnalysis has been done by the Kiel Institute to measure the economic impact of low water levels with the research showing that in a month in which water levels are below the 78cm threshold every day, German industrial production is around 1% lower than in a month with no low-water days. This prompted many producers to resort to using other means of transport or to use smaller or partially-loaded barges, all of which pushed freight costs up for producers.
A flash purchasing managers' index data for June also showed a darkening mood for Germany's manufacturing sector and more economic woes on the horizon.Įxperience of low water levels has taught us what extra negative impact these can have on the economy too 2018 was the most recent dry year for the Rhine, with water levels reduced to just 30cm in places, making it unnavigable for larger cargo barges. In the first quarter of 2022, the economy grew just 0.2% from the previous quarter, meaning it narrowly avoided a technical recession given a contraction in the previous quarter, while the inflation rate stood at 7.6% in June, weighing on domestic demand. Low water levels on the Rhine come at a very difficult time for Germany's economy with analysts fearing it could be sliding toward a recession as it contends with a high-inflation low-growth environment, supply chain bottlenecks and pressures brought about by the war in Ukraine, particularly in terms of energy.