Germany’s economic woes have deepened after new figures showed a second straight month of contraction.
S&P Global’s composite PMI showed a reading of 48.5 for Germany in August, down from 49.1 the previous month and below economists’ forecasts.
The downturn was driven by an ongoing crisis in Germany’s dominant manufacturing sector, which has now been in contraction for more than two years.
But these troubles have now started to spill over into the services sector, which had otherwise been steady.
In a further blow, employment in Europe’s largest economy decreased at the fastest rate in four years as firms expressed less optimism towards growth prospects in the coming year.
Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, branded the numbers a “real mess”.
He said: “The recession in Germany’s manufacturing sector deepened in August, with no recovery in sight. In fact, new orders took a sharper dive than last month, mainly due to a significant drop in foreign demand, signalling more trouble ahead.
“Given this, it’s hardly surprising that companies are ramping up staff cuts and slashing inventories of inputs even more aggressively than before.”
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