Germany manufacturing contraction slowed in December – survey

02 January 2012 14:35  [Source: ICIS news]

LONDON (ICIS)--Germany’s manufacturing output contracted again in December, but at a slower pace than in November, an economics research group said on Monday.

Markit said its purchasing managers’ index for Germany was 48.4, up slightly from 47.9 in November but still below the neutral “no-change” mark of 50.0.

December data pointed to a slower and only modest decrease in German manufacturing output. This was despite a relatively sharp fall in new orders, which led to further backlog clearance and efforts by firms to lower their inventories, Markit said.

Germany’s manufacturing sector ended the year with another modest reduction of production, alongside a drop in new orders for the sixth consecutive month,” said Markit senior economist Tim Moore.

A ”sustained moderation” in export sales was the main drag on the manufacturing sector during recent months, Moore said.

Manufacturers surveyed by Markit noted that a renewed downturn in demand began in Europe during the summer, and had now started to spread to clients in emerging markets, Moore added.

“Shrinking order books resulted in a sharp fall in backlogs of work during December and a shift to more cautious inventory policies,” he said.

Markit’s monthly survey is based on responses of a panel of more than 500 German manufacturing companies.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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