German and Eurozone manufacturing PMI data disappoint in August and remain in contraction territory

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The German manufacturing PMI fell two tenths in August, falling to 49.1 points from the previous 49.3, placing it for the second consecutive month in contraction territory.

In addition, the indicator disappointed market expectations, which expected an increase to 49.8 points. The August figure is the weakest seen in 26 monthsspecifically since June 2020.

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According to the Markit Economics statement, a sustained decline in new orders can be seen, while cost inflation remains in constant decline from historical levels.

The manufacturing PMI for the euro zone has also dropped two tenths, from 49.8 points in July to 49.6 in August, its lowest figure also in 26 months. The result slightly worsens the 49.7 points estimated by the consensus.

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The statement confirms that the manufacturing sector in the eurozone continued to contract in the middle of the third quarter. Production fell at a rate similar to that seen in July, while new orders fell sharply again. Weak demand was a major drag on goods producers in August, reflecting deteriorating purchasing power across Europe amid high inflation. As a result, manufacturers reduced their purchasing activity in response to the deteriorating economic outlook, although lower input needs helped reduce pressure on suppliers.

Source: Fx Street

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