German manufacturing slumps in October as new orders drop – PMI

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FILE PHOTO: A steel worker of Germany's industrial conglomerate ThyssenKrupp AG takes a sample of raw iron from a blast furnace at Europe's largest steel factory in Duisburg

BERLIN (Reuters) – The downturn in Germany’s manufacturing sector gathered pace in October as output and new orders slumped, marking a weak start to the fourth quarter that shows no sign of letting up, a surveyed showed on Wednesday.

S&P Global’s final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Germany’s economy, fell to 45.1, its lowest since May 2020 and down from 47.8 in September.

A Reuters poll of analysts had pointed to an October reading of 45.7.

“October’s PMI showed business conditions across the manufacturing sector becoming more and more difficult, with no quick turnaround in sight,” said Phil Smith, Economics Associate Director at S&P Global Market Intelligence.

“Manufacturers are gravely concerned about the outlook for the next 12 months, with expectations having fallen to their lowest since the initial COVID wave,” he added.

An index on new orders dropped to 34.5 from 39.1 amid growing concerns about the economic outlook and high energy costs.

Germany staved off the threat of recession in the third quarter with unexpected growth but the economy remained in choppy waters as high inflation driven by a painful energy standoff with Russia surged, data showed last Friday.

(Writing by Paul Carrel; Editing by Hugh Lawson)