BERLIN (Reuters) – Business activity in Germany’s private sector contracted in July, raising the likelihood of a recession in the second half of the year, preliminary results from the S&P Global/HCOB surveys of purchasing managers showed on Monday.
The “flash” composite PMI index fell to 48.3, below the 50 mark separating growth and decline in activity for the first time since January. In June, it came out at 50.6. The consensus of analysts polled by Reuters for July was 50.3.
“It’s a bad start for the third quarter,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB). “Our (forecast) of GDP for the third quarter (…) indicates (now) negative growth”, he added.
The composite PMI index, which combines the manufacturing and services sectors, represents more than two-thirds of the German economy.
The index for the manufacturing sector alone fell to 38.8 in July, from 40.6 in June and a consensus of 41.0.
The slowdown in service sector growth seen in June continued this month, coming in at 52.0 vs. 54.1 the previous month and consensus at 53.1.
(Report Maria Martinez; Claude Chendjou, edited by Kate Entringer)
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