Germany's manufacturing sector contracted again in October but rebounded somewhat from September's steep plunge as demand recovered slightly, data released today revealed.
The Reuters/BME Purchasing Managers Index rose to 48.4 in October, below the 50 mark that separates contraction from expansion but above the September's 46.0 reading, which was the biggest contraction since January.
The data follow Germany's influential Ifo business sentiment index for October, which fell for the fifth month in a row as manufacturers became more pessimistic about future economic prospects. However, their view of current trading conditions appeared to be stabilising.
Ifo said firms may have been too optimistic earlier this year and that once the downward correction of this optimism was over, the country could again see a very moderate upturn.
German companies also continued to cut jobs and streamline inventories to protect margins, raise efficiency and regain competitive pricing power in the face of weak demand.