J.P. Morgan AM: Germany's new orders fall yet the labour market remains strong

J.P. Morgan AM: Germany's new orders fall yet the labour market remains strong

October 31, 2022

Germany
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The flash composite Purchasing Managers' Index (PMI) in Germany fell to 44.1 in October, the lowest level since May 2020. New orders were particularly weak at 40.9, signalling deteriorating business confidence and dampening demand as the economic outlook continues to worsen.

Employment, however, remained firmly in expansionary territory at 52.2, as firms showed a willingness to retain staff and fill vacancies. Ongoing resilience in the labour market is not unique to the eurozone's largest economy, however, and can be seen throughout the euro area. The European Central Bank is likely to maintain a hawkish stance until both inflation and labour markets are a lot cooler. As such, recessionary risks remain elevated as the economy continues to grapple with strong inflationary pressures, rising interest rates and high energy prices.

31102022 J.P. Morgan AM

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