Economic IndicatorsTop News

German manufacturing output posts record contraction in April: PMI

imageEconomic Indicators10 hours ago (May 04, 2020 04:05AM ET)

(C) Reuters. Automated vehicles carry parts for building Porsche Taycan electric cars at Porsche’s Zuffenhausen manufacturing complex, in Stuttgart

BERLIN (Reuters) – German factory output shrank at the fastest rate on record in April and firms in the export-oriented sector cut jobs at the fastest pace in almost 11 years, a survey showed on Monday, as the new coronavirus crushed demand.

That sent IHS Markit’s Final Purchasing Managers’ Index (PMI) for manufacturing – which accounts for about a fifth of Europe’s largest economy – falling to 34.5, the lowest reading since March 2009, from 45.4 in March. The final figure was up from an initial flash reading of 34.4.

“Output nosedived as large numbers of manufacturers either temporarily closed factories or cut working hours amid a collapse in export demand across Europe and the United States, and mounting supply chain challenges,” said Phil Smith, principle economist at IHS Markit.

“Even as more manufacturers start to come back on stream, there are still some huge question marks, like what kind of demand conditions are they returning to, and for how long will supply chains be impacted,” he added.

Companies in Germany have been closing facilities and switching workers to shorter hours under a government scheme aimed at avoiding mass layoffs.

The survey showed that even this scheme, to which 750,000 had applied by April 13 and which had helped Germany weather the 2008 financial crisis, had failed to slow the pace of job cuts, the survey showed.

As output fell at the fastest rate in the data series going back to early 1996, manufacturers cut jobs at the fastest pace since May 2009.

Smith said German manufacturers expect disruption to supply and demand to continue long into this year at least, dimming the chance of a speedy recovery.

“Given such a challenging outlook, job cuts have continued to gather pace despite the widespread uptake of the short-time working scheme, thus raising the chances of a more protracted recovery,” he said.

German manufacturing output posts record contraction in April: PMI

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button
Close
Close
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!