Business conditions continued to deteriorate in the German manufacturing sector during November, with both output and incoming new work falling at faster rates than in the previous month. The seasonally adjusted Markit/BME Germany Purchasing Managers’ Index(PMI) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy – dropped for the seventh consecutive month to 47.9, from 49.1 in October. The latest reading was below the neutral 50.0 threshold for the second month running and signalled the sharpest deterioration of overall operating conditions since July 2009. Market group data for November pointed to worsening business conditions in the intermediate and investment goods sectors, but a modest improvement at consumer goods producers.
The decline in the headline PMI index partly reflected the sharpest falls in both output and new order levels since June 2009. That said, in both cases, the rates of reduction are still much softer than seen during the 2008 / 2009 recession. Lower levels of incoming new work have now been recorded for five months in a row. Anecdotal evidence from survey respondents pointed to delays in spending decisions and efforts by clients to reduce stocks in the wake of the uncertain economic outlook.
November data pointed to a sharper decline in new export business than that seen for overall intakes of new work. The drop in demand from abroad was the fastest for two-and-a-half years and all three market groups reported a reduction in exports since the previous month. Investment goods producers saw the steepest drop in new export business, followed by firms in the intermediate goods sector.
Lower incoming workloads resulted in a sharp and accelerated reduction in backlogs at German manufacturing firms. The latest fall was the third in successive months and the fastest since June 2009. This was linked to a combination of fewer order intakes, improved productivity and sufficient stocks of finished goods in the sector. Moreover, latest data indicated a further rise in post-production inventories, with some respondents attributing this to unwanted inventory accumulation following the postponement of orders by clients.
Job creation continued to slow only modestly in November. The pace of employment growth remained strong in the context of the survey history, despite easing to a 15-month low.
Meanwhile, weaker demand for inputs contributed to an improvement in supplier delivery times and lower input costs in November. Cost burdens fell only modestly, but at the most marked pace for over two years. This in turn contributed to the slowest rise in factory gate charges since February 2010.
Quelle: Markit/BME e.V.
