Germany’s manufacturing PMI falls in July

Germany’s manufacturing sector faced a deeper downturn in July, with the HCOB Purchasing Managers’ Index (PMI) falling to 43.2 from 43.5 in June, marking a continued contraction, remaining below the 50 threshold that signifies growth.

July’s reading is the lowest in 25 months, the longest such streak since 1996. The decline is attributed to a sharp reduction in output and weakening demand.

As a result, Hamburg Commercial Bank has revised its growth forecast for the German economy down to 0.2 per cent for the year from an earlier 0.5 per cent.

“Germany’s industry is off to a rough start in the second half of the year. Manufacturing production dropped further in July, showing no signs of slowing down. At the same time, companies are ramping up their staff cuts, clearly having little hope for improvement. A look at the order intake backs up their concerns. Orders fell at the fastest rate in three months, continuing a persistent decline since spring 2022.” noted Cyrus de la Rubia, the bank’s chief economist.

“It’s no wonder confidence in this sector has taken a hit. A manufacturing recovery probably won’t happen before autumn.

Attribution: Reuters & PMI report