Germany December flash manufacturing PMI 47.7 vs 48.5 expected

Decline of Germany's Manufacturing PMI

Latest data shows that Germany's manufacturing PMI for December stands at 47.7, missing expectations of 48.5. This result indicates that the manufacturing sector continues to remain in the contraction zone below 50. The decline from last month’s 48.2 raises concerns within the industry. For the first time in ten months, production in this sector has decreased this month, driven by a drastic drop in orders in November, a trend that has continued into December. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented that this trend signals a poor outlook for the upcoming year.

Stability in the Services Sector

Conversely, the services PMI registers at 52.6, just shy of the expected 53.0 and down from 53.1 last month. Economists believe the services sector is stabilizing the economy and could significantly contribute to positive GDP growth in the fourth quarter. New business has been increasing steadily for three months. The government's launch of transport projects and reforms aimed at reducing bureaucracy have led to a slight recovery in confidence in the manufacturing sector. However, whether this confidence translates into actual orders remains crucial. There are fears that the services sector may get left behind in this dynamic. The evolving economic landscape warrants close monitoring.