Advertisement
Advertisement

Drop in demand weighs on German manufacturing, outlook darkens -PMI

By:
Reuters
Updated: Jul 1, 2022, 08:06 UTC

BERLIN (Reuters) - A sharp fall in new orders weighed on German manufacturing activity in June, darkening the outlook for Europe's largest economy, a survey showed on Friday.

A robot adjusts a windscreen in a fully automated process on a model of the A-class production line of German car manufacturer Mercedes Benz at the Daimler factory in Rastatt

BERLIN (Reuters) – A sharp fall in new orders weighed on German manufacturing activity in June, darkening the outlook for Europe’s largest economy, a survey showed on Friday.

S&P Global’s final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Germany’s economy, fell to 52.0 in June from May’s final reading of 54.8, in line with analysts’ expectations and with a flash estimate.

An index on new orders came in a 43.3, falling from 47.0 in May to hit the lowest level since May 2020 and dropping further below the 50 mark, which separates growth from contraction.

“We’re seeing a rapid correction in underlying demand for German goods,” said Phil Smith, economics associate director at S&P Global Market Intelligence, adding that firms reported “multiple headwinds to export sales”.

“With backlogs now in decline, firms have downgraded their expectations for output over the next 12 months to the gloomiest for over two years,” he said.

The survey pointed to some relief on the inflation front, with rates of increase in both input costs and output prices slowing for a second straight month.

“However, it’s difficult to untangle any alleviation of pressure coming from the supply side from the effects of weaker demand,” Smith added.

(Writing by Paul Carrel; Editing by Susan Fenton)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement