BERLIN (Reuters) – Germany’s manufacturing sector remained stuck in recession in October as new orders fell for the 13th month running and factories slashed jobs at the fastest pace in almost 10 years, a survey showed on Monday.
IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Europe’s largest economy, edged up to 42.1 last month from September’s 41.7, staying well below the 50.0 mark separating growth from contraction.
The reading came in slightly better than an initial estimate published last month but was still the second-lowest since June 2009.
Economist Phil Smith at IHS Markit said the prolonged recession in manufacturing posed an increased threat to the domestic economy as factories cut more jobs.
He added, however, that the decline in employment was still worlds away from the job shredding seen during the depths of the global financial crisis over a decade ago.
“It remains to be seen if the downturn in the German manufacturing has finally reached a nadir,” Smith said, adding that developments depend on whether the U.S. government decides in mid-November to impose new tariffs on automotive imports from the EU.
The German economy shrank 0.1% in the second quarter and preliminary data on Nov. 14 is likely to show another quarter of contraction from July through September.
(Reporting by Michael Nienaber; Editing by Hugh Lawson)