One bright spot was that July’s gain was revised up to 3.9 percent from a first reading of 2.9 percent.
A combination of high energy prices and increased competition from abroad — mainly China — has weighed on the country’s manufacturing sector. The sectoral purchasing managers’ index compiled by S&P Global has been in negative territory for over two years now.
The slowdown is particularly acute in the automotive sector. A separate data reading from Monday shows that car sales were down 4.7 percent on the year in the half of 2024.
On Friday, European Union capitals voted to to impose duties on Made-in-China electric vehicles, in an effort to counter Chinese subsidies and to protect its own lagging industry. Germany, which counts China as one of its largest export destinations, voted against.
The high share of manufacturing in overall German output means that the economy is likely to contract for a second year running this year. A joint report by five of the country’s leading think-tanks suggests it will shrink 0.1 percent in 2024 before returning to growth in the following two years.
