Manufacturing Decline Causes Slowdown in Germany’s Economic Growth for June

At Extreme Investor Network, we closely monitor the performance of various sectors in the economy to provide our readers with valuable insights and analysis. In our latest report, we observed a mixed performance in the services and manufacturing sectors, which had a notable impact on new business, export sales, and inflation trends.

The Composite PMI Output Index, a key indicator of economic activity, remained above the 50.0 threshold for the third consecutive month but saw a drop to 50.6 from May’s 52.4. While the services sector showed a solid increase with an index of 53.5, signaling continued growth, manufacturing faced a significant setback with the output index falling to 44.9, the fastest decline in three months.

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New business orders saw an overall decline, mainly driven by a sharp drop in manufacturing orders, which overshadowed modest gains in the services sector. Despite a rise in new business from abroad in the services sector, manufacturing export sales fell at the quickest rate since March.

Inflation trends also varied between the two sectors, with the services sector experiencing high inflation and a slight uptick in output prices. However, the manufacturing sector saw further price cuts due to weak demand, with declines in both input and output prices easing slightly.

Our Chief Economist, Dr. Cyrus de la Rubia, expressed concerns about the sharp downturn in manufacturing, emphasizing the significant drop in new orders and inventory clearance. Despite this, the service sector remained resilient, with businesses raising sales prices and experiencing strong new orders and export business.

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In conclusion, Germany’s economic growth in June was impacted by the divergent performances of the services and manufacturing sectors. This mixed outlook poses challenges for the future, with ongoing inflation concerns in services potentially influencing future ECB policies. Stay tuned to Extreme Investor Network for more in-depth analysis and expert perspectives on the latest economic trends and developments in the stock market.

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