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Germany did not join the parade of European Union (EU) nations which showed very, very modest improvements in manufacturing purchasing managers index (PMI). France, Spain and Italy continue to post contractions, albeit at a slightly “less bad” pace. The figures show that each of these economies remains in recession, so the data is only relatively positive.

As concerns Germany, research firm Markit reported:

German manufacturing business conditions continued to deteriorate in June, and at a faster pace than in May. Although output rose for the second month running, the rate of growth was only marginal and was alongside a renewed drop in new orders. Manufacturers reacted to the fall in new business by continuing to reduce their workforces and lowering their output charges at the sharpest rate in three-and-a-half years.

And:

The final seasonally adjusted Markit/BME Germany Manufacturing Purchasing Managers’ Index (PMI) — a composite indicator designed to provide a single-figure snapshot of the performance of the manufacturing economy — posted below the neutral 50.0 mark in June, indicating a deterioration in manufacturing business conditions for the fourth month running. At 48.6, down from 49.4 in May and slightly below the earlier flash estimate of 48.7, the PMI suggested that the rate of contraction was modest overall.

After a long period of relative strength compared to the balance of Europe, Germany’s manufacturing has started to stumble, probably a sign that trouble with its trading partners in the EU has not been made up by expansion to exports to China and the United States.