Germany PMI manufacturing dropped to 43.1 in July, down from 45.0 and missed expectation of 45.2. That’s also the lowest level in 84 months. PMI services dropped to 55.4, down from 55.8, beat expectation of 55.2, a 2-month low. PMI Composite dropped to 51.4, down from 52.6, a 4-month low.
Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said:
“The health of German manufacturing went from bad to worse in July, according to the flash PMI data, raising the risk of the euro area’s largest member state entering a mild technical recession.
“The performance from Germany’s goods producers in July is the worst recorded by the survey in seven years, with the renewed weakness mainly stemming from an accelerated drop in export orders – the most marked seen in over a decade.
“Still solid growth in the service sector means that the German economy is just about keeping its head above water for now, but even here there are signs of increased worries among companies as optimism hit a three-and-a-half year low.
“In a further sign of the slowdown in new orders and gloomier outlook affecting firms’ hiring decisions, July’s flash data showed employment rising at the slowest rate for over four years, with factory job losses accelerating.”
