German economic slowdown deepens in September, bleak outlook – flash PMI

BERLIN (Reuters) – Germany’s slowdown in business activity deepened in September, a preliminary survey showed on Friday, as rising energy costs hit Europe’s biggest economy and businesses experienced a decline in new business.

S&P Global’s flash composite Purchasing Managers’ Index (PMI), which tracks both the manufacturing and services sectors which together make up more than two-thirds of the German economy, fell to 45.9 in September against 46.9 in August.

A Reuters poll of analysts had indicated a reading of 46.0.

September marks the third straight month the reading has fallen below the 50 mark that separates growth from contraction, as well as the lowest figure, if confirmed in a final reading, since May 2020.

Separately, the manufacturing index fell to 48.3 after a final reading of 49.1 in August. The consensus forecast was 48.3.

The services index fell to 45.4 after a final reading of 47.7 in August. The consensus forecast was 47.2.

“The German economy looks set to contract in the third quarter, and with the PMI showing that the slowdown accelerated in September and the survey’s forward-looking indicators also deteriorated, the outlook for the fourth quarter aren’t good either,” said economist Phil Smith. Associate Director at S&P Global Market Intelligence.

(Writing by Paul Carrel; Editing by Susan Fenton)