German Private Sector Output Falls
The Markit preliminary composite purchasing managers' index (PMI) for Germany indicated that private sector output fell at faster rate during August. A renewed contraction in services offset slower drop in manufacturing activity.
The index declined to 47.0, compared to a reading of 47.5 for July, and is below the 50-point level that separates contraction from expansion. This reading signaled the steepest rate of private sector output contraction since June 2009.
The services PMI reading slipped to 48.3 from 50.03 in July, and the manufacturing PMI advanced to 45.1 from 43.0.
The data showed to a steep and accelerated reduction in new business received by private sector companies across the nation. In the manufacturing sector, new export orders plunged in August, and the rate of contraction reached its fastest pace since April 2009.
Weaker demand contributed to a fifth successive monthly fall in employment levels in manufacturing. However, service providers beefed up their staffing numbers in August.
Tim Moore, a senior economist at Markit, said:
August PMI data highlights the weakest German private sector performance for over three years … 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.
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