According to data published by IHS Markit, German manufacturing activity declined for its twelfth consecutive month, followed by its private sector activity which dropped for the fourth consecutive month.
IHS Markit's Manufacturing Purchasing Managers Index, which measures the manufacturing sector's performance, for Germany, was at 43.4 in December, falling from November's 44.5. A figure below 50 indicates contraction while a figure over 50 means that the manufacturing sector is expanding. Services Sector Purchasing Managers Index went up to 52.0 from November's 51.7, showing an expansion of the sector.
The Composite Purchasing Managers’ Index, which takes into account both measures, remained steady at 49.4 in December, showing a contraction of the private sector activity.
France's Manufacturing Purchasing Managers’ Index also fell in December to 50.3 from November's 51.7. Services Purchasing Managers Index showed an expansion, at 52.4 in December, from 52.2 in the previous month. The composite index went down from 52.1 in November to 52.0 in December, showing a softer expansion.
The Eurozone's manufacturing activity also contracted, as the index fell to 45.9 in December from November's 46.9. The services sector performed better going up from November 51.9 to 52.4, showing an expansion. The composite index remained steady at 50.6, showing an expansion of the private sector.
German Economy Ministry Claims that the German Economy is Stagnating
The German economy ministry said on its monthly report that the economy is showing signs of stagnation, highlighting that the Industrial sector may be heading out of the current recession. The report also pointed out that fourth-quarter data showed a diminishing private consumption despite the rising disposable incomes.
The economy avoided technical recession expanding by 0.1 percent in the third quarter, after contracting by 0.1 percent on the second. The German Bundesbank expects the German Economy to grow 0.5 percent in 2019, while it expects it to grow 0.6 percent in 2020.
"Domestic demand will not rise as dynamically as in the boom period of previous years," explained the bank, adding that disposable income will increase at a slower pace due to sluggish employment growth.
By 10:43 GMT the Euro went up by 0.21 percent against the US Dollar, hitting the 1.1142 level. Conversely, it went up by 0.08 percent against the Swiss Franc, at 1.1142, while increasing by 0.25 percent against the Japanese Yen, at 121.92.