Germany: Preliminary manufacturing PMI falls to 52.0 points in June vs. 54.0 expected

• German manufacturing PMI comes in at 52.0 points in June vs. 54.0 expected.
• The German services PMI fell to 52.4 in June, against 54.5 expected.
• EUR/USD remains under pressure towards 1.0500 on mixed German PMIs.

Germany’s manufacturing and services sectors slowed their pace of expansion in June amid falling exports and strong inflation.as shown on Thursday by the preliminary report on manufacturing activity from S&P Global/BME research.

The manufacturing PMI of the economic powerhouse of the eurozone stood at 52.0 points this monthcompared to the 54.0 expected and the 54.8 of the previous month. The index fell to a 23-month low..

For its part, services PMI dipped from 55.0 previously recorded to 52.4 in June, compared to the estimated 54.5. The PMI recorded the lowest level in five months.

The preliminary S&P Global/BME Composite Production Index for Germany came in at 51.3 in June, versus 53.1 forecast and 53.7 in May. The indicator hit six-month lows.

Key Remarks from Phil Smith, Associate Head of Economics at S&P Global

“Preliminary PMI data for June shows that the German economy has lost virtually all of the momentum gained from the easing of virus-related restrictions, with services sector growth cooling sharply for the second consecutive month in June. “

“But perhaps the biggest cause for concern is a general drop in demand, with a deepening of the recession in new manufacturing orders coinciding with the first drop in service sector new business in six months, as the increase of prices and the high levels of uncertainty take their toll. However, the activity continues to be supported to a certain extent by the workload accumulated at the beginning of the year”.