BERLIN (Reuters) – Germany’s manufacturing contraction accelerated in June to its fastest pace in more than three years as output and new orders fell, final survey results showed on Monday. S&P Global/Hamburg Commercial Bank with purchasing managers.
The sector’s PMI index fell to 40.6, the fifth consecutive monthly decline, against an initial estimate which had given it to 41.0 in June after 43.2 in May.
Since July 2022, this index has been below the 50 mark separating growth and contraction in activity.
The manufacturing sector reported deeper cuts in production levels at the end of the second quarter amid increasingly weaker demand, the survey said.
“Conditions in the manufacturing sector have worsened, but this is not a disaster,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank AG, who notes that producers of goods have not yet had recourse to layoffs.
Expectations for the production outlook for the year ahead, however, fell to their lowest level since last November, as companies surveyed cited numerous headwinds for growth.
“Overall, the PMI data for the manufacturing sector shows that a recession in this sector, which was still expanding in the first quarter according to the GDP statistics, has become much more likely,” added Cyrus de la Rubia.
(Report Maria Martinez; Claude Chendjou, edited by Kate Entringer)
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