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- German manufacturing sector remains in contraction in June - IHS Markit
German manufacturing sector remains in contraction in June - IHS Markit
According to the report from IHS Markit, Germany's manufacturing sector contracted further in June. Weaker external demand and a slowdown in the auto industry continued to weigh on order books, which in turn led to declines in both output and employment. Sub sector performances continued to vary, however, with growth in consumer goods contrasting with downturns in the intermediate and investment goods categories. Elsewhere, input prices fell at a faster rate in June, dragged lower by a further reduction in buying activity and associated destocking efforts. Output expectations meanwhile turned positive for the first time in nine months, albeit remaining subdued by historical standards.
The headline Germany Manufacturing PMI showed a deterioration in overall business conditions for the sixth month in a row in June. At 45.0, up from 44.3 in May, the index was at a four-month high, but still well below the neutral 50.0 mark and close to its lowest since 2012. The slight uptick in the PMI mainly reflected the new orders component, which showed the rate of decline easing for the third month in a row in June (albeit still running at a marked pace overall). A key weakness remained export sales, where there were reports of lower demand from Asia in particular.
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