German manufacturers had another grim month in October, a new survey shows.
The sector’s Purchasing Managers Index score fell to 42.1 in October, up a tick from 41.7 in September, but still in contraction.
New orders dropped for the 13th month in a row, according to IHS Markit’s latest data revealed today
"The German manufacturing sector remains in recession and continues to pose a threat to the domestic economy through a rising number of factory job losses,” said Phil Smith from IHS Markit.
“Employment across the goods-producing sector is now falling at the fastest rate for the best part of ten years, though it should be said that the decline is nothing like that seen during the depths of the global financial crisis, and is so far mainly restricted to contractors,” Smith added.
Factories are shedding jobs at a pace not seen since January 2010, according to IHS Markit, and slashing prices to cope with the downturn.
The latest PMI data reflects the downbeat mood across German companies. The country’s industry association found that the German firms have not been this gloomy about the future since the financial crisis. The Association of Chambers of Commerce and Industry forecasts GDP growth of 0.4% in 2019, adjusted down from its previous prediction of 0.6%.
Germany’s economy contracted by 0.1% in the second quarter, as Europe’s powerhouse economy flirts with recession. Brexit, trade wars, and the general slowdown of the global economy have dampened corporate investment and hiring plans—one in two German exporters sees sluggish international demand as a major risk to their growth.