After the Russian invasion of Ukraine, German companies cut their production almost four times as much as expected.

Industry, construction and energy suppliers together produced 3.9 percent less in March than in the previous month, as the Federal Statistical Office announced on Friday.

"The last time there was a sharper decline was at the beginning of the Corona crisis in April 2020," it said.

Due to the ongoing restrictions caused by the Corona crisis and the war in Ukraine, many companies still have problems processing their orders due to disrupted supply chains.

Economists surveyed had only expected a decline of 1.0 percent, after it was still enough for its mini-growth of 0.1 percent in February.

The Russian war against Ukraine began on February 24.

"After the last five increases in a row, industrial production has suffered a severe setback - mainly due to the Russian war in Ukraine," said the Federal Ministry of Economics.

On the one hand, as an export-oriented country, Germany is disproportionately affected by the trade sanctions against Russia.

On the other hand, important goods in the production process have become scarce as a result of the war in Ukraine.

"The lack of wiring harnesses made things difficult for the automotive sector," the ministry gave as an example.

Industry alone cut its output by 4.6 percent this time, while construction grew bucking the trend by 1.1 percent.

In the energy sector, production collapsed by 11.4 percent.

"Here, the high prices have led to a significant drop in demand," said the Ministry of Economic Affairs.

The outlook is muted because of the ongoing war and tightening sanctions.

Industrial companies received 4.7 percent fewer orders in March than in the previous month, mainly due to weak foreign business.

This is the strongest slump since October 2021.

Many industrial companies are currently reporting bottlenecks, some of which have worsened since the Russian invasion: In April, three out of four companies complained about bottlenecks and problems with the procurement of preliminary products and raw materials, as the Ifo Institute found out.

The economy is also struggling with the Corona crisis in its most important trading partner China, which has sent the financial metropolis of Shanghai into a week-long lockdown.