Ger­man econ­omy takes a blow from weak­en­ing global de­mand

The Pak Banker - - BUSINESS -

FRANK­FURT: The Ger­man econ­omy took a hit this month from weak global de­mand, with a man­u­fac­tur­ing gauge drop­ping to a 15-month low. Markit Eco­nom­ics said its fac­tory Pur­chas­ing Man­agers In­dex fell to 50.2, barely above the key 50 level, from 52.3 in Jan­uary. A ser­vices gauge im­proved slightly, but a com­pos­ite mea­sure de­clined to the low­est since July. "The Ger­man econ­omy ap­pears to be in the midst of a slow­down," said Oliver Kolod­seike, an econ­o­mist at Markit. Man­u­fac­tur­ing is "near stag­na­tion," he said. While Ger­many weath­ered global head­winds through 2015, main­tain­ing its pace of ex­pan­sion in the fourth quar­ter, busi­ness con­fi­dence has weak­ened re­cently. China's slow­down is weigh­ing on ex­ports while the equity sell­off this year threat­ens a frag­ile re­cov­ery in the euro area, the coun­try's largest trad­ing part­ner. The Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment cut its global growth fore­cast last week and said both Ger­many and the euro re­gion will ex­pand less this year than pre­vi­ously es­ti­mated. Markit said the slow­down in Ger­man out­put led to in­creased cau­tion on hir­ing, with the rate of job cre­ation at the weak­est in al­most a year. France's com­pos­ite Pur­chas­ing Man­agers In­dex slipped to 49.8 from 50.2 in Jan­uary. In the 19-na­tion euro area, both the fac­tory and ser­vices mea­sures prob­a­bly de­clined this month, ac­cord­ing to sur­veys of econ­o­mists.

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