Germany economy ‘close to stagnation’ in September - survey

22 September 2011 13:50  [Source: ICIS news]

LONDON (ICIS)--Germany’s economic recovery is “teetering on the brink,” with both manufacturing and service sectors close to stagnation in September, a market research group said on Thursday.

Research firm Markit said preliminary data on its monthly purchasing manager index (PMI) for Germany showed a further decline in September, to 50.8 points, down from 51.3 in August.

September's slowdown was driven by the service sector, which recorded only a fractional rise in business activity and the weakest rate of growth since the upturn began in August 2009.

Manufacturers, however, “signalled a modest pace of production growth” that was broadly unchanged from the 25-month low posted in August, the group said.

“[Germany's] output growth in the third quarter was the slowest since the upturn began over two years ago,” said Tim Moore, senior economist at Markit.

“The outlook for the final quarter is also looking increasingly bleak, not least because the recent trend in new orders has been even weaker than that for output, especially in the manufacturing sector,” Moore added.

Markit’s PMI is based on responses from 1,000 companies in Germany's manufacturing and service sectors.

In related news, European chemical stocks fell sharply on Thursday as global markets tumbled following a gloomy economic outlook from the US Federal Reserve.

Read Paul Hodges’ Chemicals and the Economy Blog

By: Stefan Baumgarten
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