Businesses remained pessimistic towards the outlook as rising interest rates, customer uncertainty and high inflation continued to weigh on demand for goods and services.
The headline HCOB flash Germany composite PMI output index remained on a downward path in August, dropping for the fourth month in a row. Falling from July’s 48.5 to 44.7, the index moved deeper into sub-50 contraction territory to its lowest since May 2020.
Manufacturing saw a fall in production for the fourth consecutive month, with the rate of decline accelerating to the quickest for more than three years.
A reduction in total inflows of new business across the private sector was observed in August, S&P Global said in a note.
The decline continued to be led by plummeting manufacturing new orders, with a combination of customer destocking and investment reticence driving the sharpest decline in demand for goods since May 2020.
August saw a further broad-based reduction in backlogs of work, reflecting a lack of incoming new orders to replace completed projects.
Furthermore, the rate of depletion of total outstanding business quickened for the fifth month in a row to the fastest for more than three years.
Work-in-hand of German manufacturers fell particularly sharply, which in turn dampened their willingness to take on new staff and resulted in another slight decrease in factory workforce numbers.
Private sector firms in Germany remained pessimistic about the year-ahead outlook for activity in August.
ALCHEMPro News Desk (DS)
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