By Maria Martinez
BERLIN (Reuters) – The downturn in Germany’s manufacturing sector, which accounts for a few fifth of Europe’s largest financial system, continued to collect tempo in July, a survey confirmed on Thursday.
The HCOB ultimate Buying Managers’ Index (PMI) for German manufacturing fell to 43.2 in July from 43.5 in June, above a preliminary flash estimate of 42.6 and remaining beneath the 50 degree that separates progress from contraction.
The present 25-month sequence of sub-50 readings is the longest on file since 1996, the report mentioned.
“Germany’s industry is off to a rough start in the second half of the year,” mentioned Cyrus de la Rubia, chief economist at Hamburg Business Financial institution. “A manufacturing recovery probably won’t happen before autumn.”
The principle issue behind the drop within the headline PMI in July was a pointy and accelerated discount in output, which displays ongoing weak spot in demand throughout the sector, in line with the report.
Items producers have been subsequently much less optimistic about their progress prospects for the 12 months forward.
Because of the sharp drop in manufacturing and new orders in manufacturing, Hamburg Business Financial institution has lower its progress forecasts for the German financial system to 0.2% for this 12 months, down from a earlier forecast of 0.5% progress.
