The upswing in the German economy almost came to a standstill in October.

This is shown by survey data published on Friday by the analysis company IHS Markit.

The Markit purchasing managers index, calculated from a survey of 800 industrial and service companies, fell to 52 points in October - that was almost four points less than in December and the lowest value in eight months.,

Johannes Pennekamp

Responsible editor for economic reporting, responsible for “Die Lounge”.

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The indicator signals economic growth if the threshold of 50 points is exceeded.

The slump now indicates "that economic growth in Germany is beginning to stagnate at the beginning of the fourth quarter of 2021," commented Markit economist Phil Smith.

He described it as "worrying" that the slowdown in growth will coincide with a further rise in corporate buying and selling prices.

Above all, the higher energy prices have meanwhile led to higher prices that companies are charging - which is increasing inflationary pressure.

Traffic jams on the oceans

According to the analysts, the main reason for the decline is “bottlenecks in preliminary products and the resulting decline in demand in the automotive sector”. Experts do not currently assume that the congestion on the world's oceans and the shortage of semiconductors, which is slowing down the industry, can be resolved within a few months. Economic researchers are therefore more pessimistic about economic growth in Germany.

In their joint forecast, the leading research institutes are only anticipating a 2.4 percent increase in gross domestic product this year, but then an increase of 4.8 percent in the coming year. The only positive message that can be found in the new figures: companies are continuing to hire new employees despite the current problems. The companies remained optimistic, said Michael Holstein, chief economist at DZ BANK.

The data for the entire euro area were also disappointing from the point of view of economists. The corresponding economic indicator fell to a six-month low, but remained above the German value at 54.3 points. It was clear that the strong growth in the summer months would slow down, commented Bert Colijn from ING Diba. However, the pace of the decline caused a bad feeling. The goods bottlenecks might hurt the economy more than previously thought.

In addition to the delivery problems, the pandemic situation is slowly but surely moving back into the focus of economic researchers.

The number of infections, which are rising again in many places, fueled concerns about new impairments for companies.

"Once again, these fears hit primarily the consumer-related sectors such as travel, tourism and leisure," commented the Markit analysts.