Forexpros — Manufacturing activity in Germany fell more-than-expected in August, slumping to the lowest level since September 2009, official data showed on Thursday.
In a report, market research group Markit said that its final reading of German’s manufacturing purchasing managers’ index fell to a seasonally adjusted 50.9 in August, down from a preliminary reading of 52.0.
Analysts had expected the final reading to hold steady at 52.0.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Weaker new business levels were the main reason for subdued output growth in August. Latest data pointed to a fall in intakes of new work for the second month running and the rate of contraction was the fastest since June 2009.
Commenting on the report, Tim Moore, Senior Economist at Markit said, “Germany’s manufacturing sector came closer to stagnation in August, with production growth hitting a 25-month low amid a further drop in new orders.”
He added that, “Heightened uncertainty about the global economic outlook and the escalating euro area debt crisis were cited as the main reasons why export clients put the brakes on spending in August.”
Following the release of the data, the euro extended losses against the U.S. dollar, with EUR/USD shedding 0.47% to trade at 1.4305.
Meanwhile, European stock markets added to losses after the open. The EURO STOXX 50 fell 0.85%, France’s CAC 40 dropped 0.8%, the FTSE 100 declined 0.5%, while Germany’s DAX sank 1.2%.
Forexpros
