Germany: Preliminary manufacturing PMI shrinks to 49.2 in July vs. 50.6 expected

• German Manufacturing PMI falls to 49.2 in July vs. 50.6 expected.
• Services PMI in Germany falls to 49.2 in July vs. 51.2 expected.

German manufacturing and services sectors contracted in July as the recession gathered pace, the S&P Global/BME research preliminary manufacturing activity report reported on Friday.

The Eurozone economic powerhouse manufacturing PMI stood at 49.2 this month, compared to the 50.6 expected and the previous 52.0. The index fell to a 25-month low.

For his part, the Services PMI down from 52.4 prior to 49.2 in July, compared to the estimated 51.2. The PMI hit the lowest level in seven months.

The S&P Global/BME Preliminary Composite Production Index for Germany stood at 48.0 in July, compared to 50.1 forecast and 51.3 in June. The indicator hit 25-month lows.

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

“Having enjoyed a boost to growth from earlier easing of virus-related restrictions, a collision of various headwinds in July served to push the German economy into contraction territory for the first time in recent memory. which goes from 2022.”

“Ongoing supply delays and uncertainty caused by the war in Ukraine continued to be reported as factors weighing on company results, but based on a reading of anecdotal data, inflation and the pressures it is putting on budgets was a notable feature behind the worst performance of private sector activity since the height of the first pandemic wave in the spring of 2020. Bearing this in mind, although we are seeing a downward trend in our price indices, the Inflation rates remain stubbornly high according to the July survey.”