Germany December flash manufacturing PMI 47.4 vs 46.3 expected

Previous 6.2 Services PMI 9.0 vs 6.3 expected Previous 6.1 Composite PMI 8.9 vs 6.5 Previous 6.3 This is a modest improvement from November, underlining that the economic slowdown is visible from Germany. That may help soften the recent gloom, but it doesn’t take away the fact that recessionary risks remain and are very much in play now. SandP Global notes that: „The latest flash PMI paints a slightly less gloomy picture of the German economy as the end of the year approaches. While still in declining territory, the core index showed a slower decline in general business activity in December. „Price pressures remain at historic highs, largely reflecting continued transmission of high energy costs, but positive signs can also be seen here – the inflation rate of both input costs and output costs fall to several levels – lowest demand of the month against the backdrop of weaker demand and alleviates supply chain friction. „Supplier delivery times improved significantly again in December, supporting production levels slightly during the month due to better material availability. However, we continue to see a trend of new orders falling much faster than production, which, if continued, bodes poorly for future performance as companies are eating their backlog. „Falling demand, high inflation and tight financial conditions explain why businesses, especially manufacturers, remain disillusioned about the outlook. Compared to three months ago, when concerns about the energy crisis were at their peak, nerves have calmed somewhat, another sign that the expected recession may be less than previously feared.

Ethan Andrews

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