Germany manufacturing contraction eases slightly in August

23 August 2012 15:51  [Source: ICIS news]

LONDON (ICIS)--The contraction in Germany’s manufacturing sector eased slightly in August, compared with July, but new export orders kept dropping, a research group said on Thursday.

Markit said that preliminary data for its monthly manufacturing purchasing managers’ index (PMI) for Europe’s largest economy showed that the index rose to 45.1 points in August, from 43.0 in July. Readings of below 50.0 indicate a contraction.

However, Markit’s composite PMI for Germany – which includes both manufacturing and services – fell to 47.0 points in August, from 47.5 in July, as the services sector weakened.

“Overall, the latest survey indicates that the German economy is sailing into greater headwinds as the third quarter progresses, with PMI readings slipping deeper into territory normally associated with GDP contractions,” said Tim Moore, senior economist at Markit.

“Outside of the 2008/2009 downturn, the German composite index hasn’t been this low for this long since the time of the 2003 recession,” Moore said.

“Perhaps the most worrying but least surprising development in August was the accelerated reduction in new work from abroad, as manufacturers posted the steepest rate of export contraction since April 2009,” he added.

Markit’s PMI for Germany is based on a panel of 1,000 companies from the country's manufacturing and service sectors.

Last week, Germany’s economics ministry reported that the country’s GDP growth slowed to 0.3% in the second quarter from the first quarter - after 0.5% growth in the 2012 first quarter from the 2011 fourth quarter.

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

By: Stefan Baumgarten
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