Berlin, Germany – In a recent survey conducted by purchasing managers, it was revealed that German business activity experienced its sharpest decline in more than three years during the month of August. The struggling manufacturing sector appears to be a key contributor to this downward trend.
The HCOB Flash Germany Composite PMI Output Index, which measures activity across both manufacturing and services, dropped from 48.5 in July to a low of 44.7 in August. This marks the lowest level since May 2020, indicating a further contraction in activity as it falls below the no-change level of 50.
While the decline in the manufacturing output index continued into August, Cyrus de la Rubia, the chief economist at Hamburg Commercial Bank, suggests that there may be some hope on the horizon as the industry’s downturn seems to be reaching its bottom. However, this sentiment is counterbalanced by the fact that the services sector also hit a nine-month low in the survey. De la Rubia states that any anticipation of the services sector rescuing the German economy has now faded away.
HCOB, the organization responsible for conducting the survey, reports that businesses remain skeptical about the economic outlook. Factors such as rising interest rates, customer uncertainty, and high inflation continue to weigh heavily on the demand for goods and services.
Following the release of this data, the euro experienced a dip, reaching a two-month low against the dollar, according to FactSet.
