Ellis Marshall Global reports trade war and Brexit uncertainty send German manufacturing sector into recession territory for sixth straight month.
June was the sixth consecutive month of manufacturing downturn for Germany and Ellis Marshall Global economists have warned that this situation was unlikely to improve given ongoing fallout from the US-China trade war and uncertainty regarding the eventual outcome of Brexit.
Ellis Marshall Global economists say activity in the German services sector increased slightly to reach a two month-high and Ellis Marshall Global economists believe that the latest data could indicate that the decline in activity is easing but more slowly than expected.
Activity in the manufacturing and services sectors contributes two-thirds of Germany’s GDP and, given recent disappointing growth, the German government has already cut its growth forecast for this year to 0.5 percent.
Factory output around the world has been faltering in recent months causing concern about the outlook for the global economy. Ellis Marshall Global analysts say many central banks are weighing the need for additional stimulus as a result.
While Europe has suffered the most dramatic downturn, Japan’s manufacturing activity is also at its weakest level since 2016 and, as new orders have also declined, Ellis Marshall Global economists believe a recovery in the coming months is not likely.
Ellis Marshall Global economists say most European manufacturers are settling in for a tough spell as factors such as geopolitical uncertainty and decreased demand for European goods from China will likely continue to take a toll on the manufacturing sector for the remainder of 2019.