German economic downturn deepens in September, outlook grim – flash PMI

German economic downturn deepens in September, outlook grim – flash PMI

The skyline with the financial district is photographed during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, Oct. 26, 2020, REUTERS/Kai Pfaffenbach/File Photo GLOBAL BUSINESS WEEK AHEAD

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BERLIN, Sept. 23 (Reuters) – The downturn in German activity deepened in September, a preliminary survey found Friday, as higher energy costs hit Europe’s largest economy and companies saw a drop in new business.

S&P Global’s 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 from its last reading. 46.9 in August.

A Reuters poll of analysts had pointed to a reading of 46.0.

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September marks the third straight month that the reading fell below 50 separating growth and contraction, as well as the lowest figure, if confirmed in a latest reading, since May 2020.

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

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

“The German economy appears to be contracting in the third quarter, and with the PMI showing the decline in September and the survey’s forward-looking indicators also deteriorating, the outlook for the fourth quarter doesn’t look good either,” said Phil Smith, Economics associate director at S&P Global Market Intelligence.

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