The grimmest aspect of today’s German PMI report concerned exports:
Companies that reported a decrease in production levels in August generally linked this to lower
volumes of new business and fewer outstanding workloads at their plants. August data highlighted a
sharp fall in new order levels, although the rate of contraction eased slightly from July’s low. The slower pace of decline largely reflected a less marked drop in domestic demand, as new export work fell at the steepest rate since April 2009.
Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe. Investment and intermediate goods producers recorded the steepest reductions in new export orders. Meanwhile, August data signalled a rapid fall in outstanding business at manufacturing firms, which extended the current period of contraction to 12 months.