The eurozone crisis seems to be deepening further with shrinking German business confidence and activity levels, as the Europe’s largest economy is staring at recession and dispelling the damage that the eurozone debt crisis is inflicting upon Europe.
Germany’s manufacturing sector has dragged the entire European private sector into debt crisis by sliding to 45.7 in October from 47.4 the previous month. The German manufacturing activity suddenly fell to 48.1 in October from 49.2 in September, indicating a contraction, fuelled by a steep drop in the automobile sector and exports to southern Europe.
Germany’s private sector activity fell for a consecutive sixth month as factory order books were very few and the demand for exports weakened, with the manufacturing element of the Purchasing Managers’ Index (PMI) also below all forecasts. The Ifo Institute’s business climate index, which questions executives at 7,000 companies, fell for the sixth successive month to 100 in October from 101.4 in September.
Germany’s dismal state showed how the eurozone debt crisis afflicting southern European countries is spreading at a faster rate than expected to traditionally more robust northern economies.
The manufacturing sector continued to show clear signs of distress as the eurozone crisis has dented revenues at Europe’s largest industrial groups, forcing many companies to shut plants or cut thousands of jobs.
On Wednesday, Ford became the third leading automaker to shut a plant in Europe after union workers said that the carmaker had decided to close its main factories in northern Belgium by the end of 2014. Around 4,500 jobs at Ford and 5,000 more among subcontractors will be affected by the move.