miércoles, 24 de septiembre de 2014

miércoles, septiembre 24, 2014

Putin leaves Germany’s factories in a worse state than anyone imagined

Surveys of the German manufacturing sector have slumped to their weakest levels since June 2013, as tensions over Russia and Ukraine


Key gauges of Germany manufacturing slumped in September, falling to a 15-month low as ongoing tensions over Ukraine weighed on the sector.

Markit’s purchasing managers’ index (PMI) for the sector dropped to 50.3, from 51.4 a month earlier. The reading is barely above 50, implying that the sector is expanding, but slowly.

No analyst polled by Reuters expected a number this bad.

The most pessimistic expert forecast that the PMI figure would fall to 51, while the average analyst believed Germany’s PMI would drop to 51.2.

Germany’s factories are particularly exposed to any conflict between Russia and its neighbours, as well as the tit-for-tat sanctions exchanged between Russia and the EU.

Measures of new orders also slipped for a fourth consecutive month, pointing to a further slowdown ahead.
“Weak manufacturing data have become one of the most conspicuous features of the fragility of a broad-based recovery”, said Oliver Kolodseike, economist at Markit.

Germany’s dominant service sector will be increasingly relied upon to deliver growth. The sector’s PMI reading rose to 55.4 in September, a rise of 0.5 points on the previous month.

“September’s flash PMI results paint a mixed picture of the health of the German economy at the end of the third quarter”, said Mr Kolodseike. Markit expects German GDP to rise by just 0.4pc in the quarter.

Meanwhile, incoming minimum wage legislation, scheduled for January 2015 has “weighed on service sector sentiment, with business expectations the lowest in nearly two years”, Mr Kolodseike said.

Equivalent PMI numbers for France showed both its manufacturing and services sectors in contractionary territory - at 48.8 and 49.4 respectively.

The data suggest that the nation’s zero growth trend could continue. INSEE today confirmed that France’s economy managed no growth at all in the second quarter of the year.

“Anaemic demand continues to hold back the private sector”, said Jack Kennedy, senior economist at Markit, “with further price cutting insufficient to prevent new orders from falling”.

The continued weakness saw employment fall at its sharpest rate since February.

PMI for the euro area as a whole dropped to 52.3, down by 0.2 points since August.

The fall "adds to signs that the region's economy barely expanded in the third quarter after the second quarter's stagnation", said Jennifer McKeown, senior European economists at Capital Economics.

"This survey does nothing to alter the picture of a struggling eurozone economy, intensifying the pressure on governments and the European Central Bank to provide more policy support".

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