German Economic Crisis Accelerates
London, 22 August 2024
August 2024 saw a decline in the HCOB Germany Composite PMI to 48.5 from July's 49.1, below market expectations of 49.2, according to early estimates.
This suggests that the reduction in company activity is happening a little faster. The third quarter saw a considerable decline in manufacturing production, albeit at a much slower rate than the month before (index at 42.9).
The growth of businesses in the service sector slowed down for the third straight month, hitting its lowest level since March. Due to a reduction in optimism about future growth, business activity fell for the second consecutive month, and job losses reached their greatest rate in four years.
Prices for products and services rose at the quickest rate in the previous six months, albeit remaining consistent with long-term trends.
Service sector cost pressures subsided as manufacturing procurement prices started to stabilise following a 1.5-year decrease. Future expectations have fallen to their lowest point since January.
Forecast
Germany's composite PMI dropped from 49.10 points in July 2024 to 48.50 points in August. By the end of this quarter, analysts and Trading Economics global macro models predict that Germany's composite PMI will stand at 51.00 points.
Trading Economics models predict that the Germany Composite PMI will trend between 53.40 points in 2025 and 54.00 points in 2026 over the long run. (Source: Trading Economics)
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