Partial lockdown slowed growth in German manufacturing sector in November

German manufacturing sector growth slowed in November on tighter measures to contain a second wave of coronavirus.

The Manufacturing Purchasing Managers’ Index, which tracks the activity in manufacturing sector, fell to 57.8 in November from 58.2 in the previous month, showing that goods producing sector was affected by renewed lockdown measures that mainly hurt services sector and spending and are going to extend until Dec 20.

But despite weaker than expected data and fresh downside risk on extension of the lockdown, export-oriented companies remain optimistic, as strong demand for German goods from abroad is expected to boost export sales and cushion the impact of lockdown-weakened domestic demand.

The survey also suggests that the industrial sector is so far relatively unharmed by the second wave of pandemic, but economists expect Germany’s GDP to contract by 1% in the fourth quarter, after surprise 8.5% rebound in Q3 from unprecedented 9.8% plunge during the pandemic in the second quarter.