Germany business suffers sharp decline in June – survey

21 June 2012 14:30  [Source: ICIS news]

LONDON (ICIS)--German manufacturing and services output fell to its lowest level in three years in June, an economics research group said on Thursday.

Research firm Markit said its monthly purchasing managers index (PMI) for Europe’s largest economy fell from 49.3 points in May to 48.5 in June - the lowest level since June 2009 amid the global financial crisis. Readings of below 50.0 indicate a contraction in output. 

Manufacturers were especially hard hit, with many indicating a steep and accelerated downturn in new export business during June, the group said. The pace of June’s reduction in manufacturing was the fastest since April 2009, it added.

“German manufacturers were at the forefront of the downturn, as a worsening global economic backdrop and the ongoing euro crisis weighed heavily on export demand,” said Markit’s senior economist Tim Moore.

“Anxiety created by the run-up to the Greek election appears to have severely dented business sentiment,” Moore said.

“While an impending ‘Drachmageddon’ scenario has been avoided, there nonetheless seems a deepening consensus among German businesses that the euro area turbulence has already damaged their growth prospects for the latter half of 2012,” he added.

Markit’s PMI is based on a survey of about 1,000 German manufacturing and services firms.

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

By: Stefan Baumgarten
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