Current: German industry recovers slightly – but “danger of prolonged recession”

The German purchasing managers’ indices (Markit PMI; August) have just been published:

Manufacturing 43.6 (forecast was 43.0; previous month 43.2)

Services 53.3 (forecast was 52.5; previous month was 52.6)

Total index 54.4 (forecast was 50.5; previous month was 50.9)

And Phil Smith from Markit, who collects the data:

“The German economy remained divided even in August: The service sector continued to expand and the industry was still deep in crisis. Although economic growth has accelerated slightly. The danger of a prolonged recession in the third quarter of 2019 is by no means averted – especially against the backdrop of worrying early indicators. The service index has declined slightly, but is still showing robust growth. In some sub-indices, however, there are also signs of cracks in the service provider sector, for example in order intake, which showed hardly any growth, and in the business outlook, which has fallen to its lowest level for almost five years. The outlook for industry has also deteriorated further and is now at a record low. Moreover, the persistent slump in orders was increasingly reflected in the labour market. Job creation almost came to a standstill as a result of overcapacity and a generally miserable business climate.”

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