Forexpros – Manufacturing activity in Germany slowed to the lowest level in three years in June, renewing concerns over the impact of the euro zone’s sovereign debt crisis on the region’s largest economy, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary German manufacturing purchasing managers’ index declined by 0.5 points to a seasonally adjusted 44.7 in June from a final reading of 45.2 in May.
Analysts had expected the index to hold steady at 45.2 in June.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Manufacturers indicated a steep and accelerated downturn in new export business during June, with the pace of reduction the fastest since April 2009.
Meanwhile, the report showed that service sector activity in Germany expanded at a slower rate than expected in June.
The preliminary services purchasing managers’ index fell by 1.5 points to a seasonally adjusted 50.3 in June. Analysts had expected the index to dip 0.3 points to 51.5.
Commenting on the report, Tim Moore, Senior Economist at Markit said, “German manufacturers were at the forefront of the downturn, as a worsening global economic backdrop and the ongoing euro crisis weighed heavily on export demand.”
Following the release of the data, the euro added to losses against the U.S. dollar, with EUR/USD shedding 0.32% to trade at 1.2667.
Meanwhile, European stock markets were lower after the open. The EURO STOXX 50 fell 0.6%, France’s CAC 40 declined 0.5%, London’s FTSE 100 dipped 0.6%, while Germany’s DAX slumped 0.7%.
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