Downturn in German manufacturing activity extended in August

By Tuba Ongun

ANKARA (AA) – The downturn in Germany's manufacturing activity extended in August with output decreasing at a faster pace amid rapidly declining new orders, according to the purchasing managers’ index (PMI) data released on Friday.

The Hamburg Commercial Bank (HCOB) Flash Germany Manufacturing PMI came in at 39.1 in August, slightly up from July's 38.8.

Despite the slight hike, the index saw its second-lowest reading since May 2020.

Manufacturers reduced output for the fourth consecutive month in August, at the fastest pace since coronavirus-related shutdowns in spring 2020.

New orders continued to drop sharply, with the rate of decline accelerated slightly since July to the fastest for more than three years.

Customer uncertainty, an ongoing destocking cycle, weakness in the construction sector, and a general lack of appetite for investment, were cited as reasons for the lack of demand, read the statement.

"The darkest hour is just before dawn. This may be the situation the German manufacturing sector is in," said Cyrus de la Rubia, chief economist at HCOB.