Berlin (Reuters) – The German economy remains at acute risk of recession. The purchasing managers’ index for the private sector – industry and service providers together – surprisingly fell by 0.9 to 46.1 points in February.
The financial services provider S&P Global announced this on Thursday in its monthly company survey. The barometer thus moved further away from the growth threshold of 50 points, which has now been missed for eight months. Economists surveyed by the Reuters news agency, however, had predicted a slight increase to 47.5 points.
“The German economy remains under pressure,” said economist Tariq Kamal Chaudhry of Hamburg Commercial Bank (HCOB), which is sponsoring the survey. This is primarily due to industry: Here the barometer, which is widely followed on the financial markets, fell by 3.2 points to 42.3 points. “Things are looking pretty bleak for German industry now,” said Chaudhry. They suffer from high interest rates, expensive energy, geopolitical risks and a weak global economy. Production is falling sharply and new orders from home and abroad are “deteriorating drastically”.
Things aren’t looking rosy for service providers either. Here, the purchasing managers’ index increased by 0.5 points to 48.2 points, but also remained noticeably below the growth mark of 50. “The light at the end of the tunnel is visible, but will probably only be reached in the second quarter,” said Chaudhry Looking at the service sector.
The German economy shrank by 0.3 percent in the fourth quarter of 2023. If there is another minus in the current quarter, it is referred to as a technical recession. According to the Bundesbank’s forecast, this is also a threat due to the increasing number of strikes. It cannot be ruled out that the various strikes, including in the rail and air transport sectors, will affect production,” says the current monthly report. Gross domestic product (GDP) could therefore decline slightly again in the first quarter.
(Report by Rene Wagner, edited by Christian Götz. If you have any questions, please contact our editorial team at [email protected])