Germany August final manufacturing PMI 39.1 vs 39.1 prelim

<ul><li>Prior 38.8</li></ul><p>No change to the initial estimate as Germany's manufacturing sector remains in a deep recession, with output falling at its fastest pace since May 2020. Subdued demand conditions continue to be the root cause of the problems here but at least there is some easing in both input costs and output prices. HCOB notes that:</p><p>"The darkest hour is just before dawn. This may be the situation the German manufacturing sector is in. To be sure, output
falling at the steepest rate since 2020 doesn't seem to provide hope in any way. However, the pace of destocking of inputs
has slowed a little bit and the deterioration of new orders has stabilised. At the same time, companies continued to be
reluctant to make substantial job cuts. It looks as if the manufacturing sector is starting to bottom out, even though this
process will take a while.
</p><p>“Our GDP nowcast for manufacturing, which considers the HCOB PMI indicators, suggests that output should shrink by
almost 1% in the third quarter. Nevertheless, we are confident that the destocking cycle will come to an end during the fourth
quarter and that should set a good tone for 2024.
</p><p>"The backlog of work is still shrinking at a fast pace, and so are export orders. Having said this, the rates of contraction have
slowed down a bit, which fits into the picture of global manufacturing bottoming out.
“There is some good news for companies, as a softer downturn in factory gate charges suggests that their erosion of pricing
power seems to have lost some momentum.”</p>

This article was written by Justin Low at www.forexlive.com.