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Germany\u2019s economic downturn worsened this month with both manufacturing and services activity contracting, a preliminary survey showed on Wednesday.<\/p>\n
Underlying data showed a convergence in performance between the two monitored sub-sectors, the report said, with the decline in manufacturing output easing, while the services sector posted its steepest drop for five months.<\/p>\n
The HCOB German Flash Composite Purchasing Managers\u2019 Index (PMI), compiled by S&P Global, fell for the seventh consecutive month to 47.1 in January from December\u2019s 47.4, below the 47.8 forecast by economists.<\/p>\n
A reading below the 50 level points to a contraction in business activity.<\/p>\n
The composite PMI index tracks the services and manufacturing sectors that together account for more than two-thirds of the German economy.<\/p>\n
\u201cGermany has faced a sluggish start to the new year,\u201d said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.<\/p>\n
The manufacturing PMI rose to 45.4 from 43.3 in December, above analysts\u2019 expectations of 43.7, but still in contraction territory.<\/p>\n
Red Sea re-routings are having an impact on supply chains of the manufacturing sector as evidenced by the strong fall in the delivery times sub-index, de la Rubia said.<\/p>\n
Due to the inverted relationship of this sub-index with the manufacturing index, the manufacturing PMI rose above forecasts.<\/p>\n
Despite the challenges in the Red Sea, the ongoing dip in input costs, albeit with a softer trajectory, hint that transport expenses may not wield overwhelming influence yet over the aggregate unit costs of the myriad consumer goods traversing this route, de la Rubia said.<\/p>\n
\u201cIn contrast to the manufacturing realm, inflation remains a pressing issue in the service sector,\u201d de la Rubia said.<\/p>\n
Business activity in the services sector fell to a 5-month low of 47.6 in January from 49.3 in December, below analysts\u2019 forecast of 49.5.<\/p>\n
\u201cServices activity has not only declined for the fourth consecutive month but has also accelerated in its downturn,\u201d de la Rubia said.<\/p>\n
The survey showed continued broad-based weakness in demand but with limited spillover to the labour market.<\/p>\n
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Germany’s economic downturn worsened in January, with both manufacturing and services activity contracting. The HCOB German Flash Composite Purchasing Managers’ Index (PMI) fell to 47.1, below economists’ forecast of 47.8. The manufacturing PMI rose to 45.4, but still in contraction territory. Business activity in the services sector fell to a 5-month low of 47.6. The survey showed continued weakness in demand but limited impact on the labor market.<\/p>\n","protected":false},"author":3,"featured_media":2265,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4],"tags":[186,189,3,26,250,67,187],"class_list":["post-2264","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cyprus","tag-business","tag-businesspick","tag-cyprus","tag-economy","tag-google","tag-inflation","tag-international"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"\n