IHS Markit's Flash Germany Manufacturing PMI remained little changed at 41.9 in October, a slight increase from September's ten-year low of 41.7, however red alerts flashed below the surface as employment in Germany's factory industry fell the most in almost 10 years.
Most ominously, the survey showed employment falling for the first time in six years.
"October saw employment across the German private sector fall, albeit only slightly, for the first time in six years. Job losses were largely centered on manufacturing, where staffing numbers fell to the greatest extent for nearly ten years amid the widespread paring of temporary and contract workers. That said, a slowdown in service sector job creation to a three-and-a-half-year low was also recorded."
"The drop in overall employment in October was in line with signs of easing capacity pressures and a deterioration in business confidence towards the future activity. Firms reduced backlogs of work for the twelfth month in a row and at the quickest rate for nearly seven years," IHS wrote.
"Hopes of a return to growth in Germany in the final quarter have been somewhat dashed by the October flash PMI numbers, which show business activity in the Eurozone's largest economy contracting further and underlying demand continues to soften."
"Perhaps most concerning are the signs of increasing strain on the domestic economy, with the growth of service sector activity slowing to the weakest since September 2016 and employment now in decline for the first time in six years."
The souring outlook in Germany is a clear indication the Eurozone might not see a recovery this year.
https://www.zerohedge.com/economics/germanys-manufacturing-recession-deepens-employment-falls-first-time-six-years
Most ominously, the survey showed employment falling for the first time in six years.
"October saw employment across the German private sector fall, albeit only slightly, for the first time in six years. Job losses were largely centered on manufacturing, where staffing numbers fell to the greatest extent for nearly ten years amid the widespread paring of temporary and contract workers. That said, a slowdown in service sector job creation to a three-and-a-half-year low was also recorded."
"The drop in overall employment in October was in line with signs of easing capacity pressures and a deterioration in business confidence towards the future activity. Firms reduced backlogs of work for the twelfth month in a row and at the quickest rate for nearly seven years," IHS wrote.
"Hopes of a return to growth in Germany in the final quarter have been somewhat dashed by the October flash PMI numbers, which show business activity in the Eurozone's largest economy contracting further and underlying demand continues to soften."
"Perhaps most concerning are the signs of increasing strain on the domestic economy, with the growth of service sector activity slowing to the weakest since September 2016 and employment now in decline for the first time in six years."
The souring outlook in Germany is a clear indication the Eurozone might not see a recovery this year.
https://www.zerohedge.com/economics/germanys-manufacturing-recession-deepens-employment-falls-first-time-six-years
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