Germany's manufacturing activity declined at a faster rate in June, defying economists' expectations that the downturn would ease, latest data showed Thursday.
The seasonally adjusted purchasing managers' index for the manufacturing sector dropped to a two-month low of 48.7 in June from 49.4 in May, data from a survey by Markit Economics and BME revealed. Economists had forecast the index to rise to 49.9. Readings below 50 signal contraction, while those above indicate growth.
Driving the downturn, production at German factories increased at a slower rate in June. New business received by goods producers decreased at a faster rate in June amid signs of weakening demand in both domestic and export markets.
Reflecting the reduction in workloads, firms lowered their staffing levels at a faster rate during the month.
Meanwhile, the index of activity in the service sector rose to 51.3 in June from 49.7 in the previous month, hitting a four-month high, and suggesting that the sector have returned to the expansionary territory.
The composite output index, which assesses both the factory sector and the service sector, edged up to a four-month high of 50.9 from May's reading of 50.2, showing that overall activity still remained at near-stagnation levels.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.