ISTANBUL
The German manufacturing sector closed the year 2024 in contraction due to declines in production and orders, according to an S&P Global report released on Thursday.
Manufacturing purchasing managers’ index of Germany saw a decline of 0.5 points, from 43 to 42.5, a three-month low.
The drop in the PMI was caused mainly by faster falls in both output and new orders, its two weightiest components.
In December, production volumes fell at the second-fastest rate in the past 14 months, owing to a particularly sharp decline in the intermediate goods sector.
Employment, company inventories, production, and new orders all fell, while firms’ expectations for production growth this year remained stable.
Cyrus de la Rubia, chief economist at the Commercial Bank of Hamburg, said: “The situation in the manufacturing sector is still quite grave. The fact that production is falling rapidly and new orders continue to decline makes it clear that the sector will not come out of recession anytime soon.”
“The two-and-a-half-year recession in the manufacturing sector could end in the second half of 2025,” De la Rubia said, noting that companies cut staff every month last year and backlogs of orders fell across the board.
