German economic downturn deepens in Aug

A downturn in German business activity deepened in August, a preliminary survey showed on Tuesday, as companies saw demand dampened by a combination of high inflation, rising interest rates and economic uncertainty.

S&P Global’s flash composite Purchasing Managers’ Index (PMI), which tracks both the manufacturing and services sectors which together account for more than two-thirds of Europe’s biggest economy, fell to 47.6 in August from July’s final reading of 48.1, in line with analyst forecasts for a reading of 47.4.

August marks the second month in a row that the reading fell below the 50 mark that separates growth from contraction, as well as the lowest figure if confirmed in a final reading at the end of the month, since June 2020.

Separately, the manufacturing index rose to 49.8 in August from 49.3 the previous month, beating analyst forecasts of 48.2, while the services index fell to 48.2 from 49.7 the month before, lagging expectations for a reading of 49.0 for August.