S&P Global: Germany's private sector sees further contraction in September
Date
9/23/2024 9:18:57 AM
(MENAFN) Germany's private sector experienced a further contraction in September, marking the sharpest decline in seven months, according to a report by S&P Global. The country's business activity was hit hard by a significant reduction in manufacturing output and a near-stagnation in the service sector. Employment dropped at an increasing rate, and for the first time in 2024, business expectations turned pessimistic.
The report highlighted easing inflationary pressures, with slower price increases in services and more frequent discounting in manufacturing. Germany’s manufacturing purchasing managers index (PMI) dropped to 47.2 in September, down from 48.4 in August, reflecting the most severe contraction in 12 months. A PMI below 50 indicates shrinking business activity.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the deepening slump in manufacturing has quashed hopes for an early recovery. He pointed out that output decreased at the fastest rate in a year, with new orders collapsing, and companies are cutting jobs at levels not seen since the COVID-19 pandemic.
De la Rubia also emphasized that major automotive suppliers announcing job cuts are contributing to growing concerns about deindustrialization in Germany. He warned that a technical recession now appears inevitable.
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