Another poor data on the German economy. “Not only do they not produce, they also provide services…”
Although the August PMI index for manufacturing in Germany improved slightly, it is still below 50 points. Services PMI was below this level. The situation is similar in the second economy of the euro zone.
Today’s readings of PMI indices (reflecting the opinions of managers in companies, which is treated as a leading indicator describing the expected changes in the economic situation) for the two largest economies in the euro zone, ie Germany and France, brought a big surprise. It turned out that the recently weak industry is gaining slightly, and the stronger services are falling.
Germany’s PMI is up, but…
The data quoted by Business Insider Polska show that the PMI index, which determines the economic situation in the German industrial sector, increased from 38.8 points in July to 39.1 points in August. This is a better result than forecasted by experts (a drop to 38.7 points was assumed). The situation is similar in France, where the manufacturing PMI rose from 45.1 points in July to 46.4 points in August. In this case, the final reading also turned out to be better than forecast (it is assumed that July’s result will be maintained).
However, it should be emphasized that although August’s results are better than July’s, we are dealing with readings below 50 points, and this is the conventional borderline separating a good economic situation from a recession.
The PMI for services in Germany was below 50 points. In August, its value amounted to 47.3 points against 52.3 points a month ago. The data surprised experts who forecast a decline to only 51.5 points. A slightly smaller decrease – from 47.1 points to 46.7 points – occurred in France.
– Germany: not only do they not produce, but also services have given up. It is weak and additionally unstable. Downward risks predominate. France: weak and stable. Risk down – mBank economists comment on today’s data.
Bank experts predict that the European Central Bank (ECB) will “throw in the towel” and end the cycle of interest rate hikes.
The number of bankrupt companies in Germany is increasing
As we recently reported, the difficult economic situation in Germany is causing the number of bankrupt companies to increase. Two weeks ago, the Federal Statistical Office in Wiesbaden announced that in July, 23.8 percent more people filed for insolvency proceedings. more companies than a month ago.
