The revision sees the print fall to a 26-month low amid a sustained sharp downturn in new orders. The only bright spot is that inflation pressures are seen easing from historic highs. S&P Global notes that:
"The Germany Manufacturing PMI remained in contraction territory in August, with the sector under pressure from a notable moderation in demand. New orders continued to show a steep decline, albeit from historically high levels, with economic uncertainty and strong inflation both acting to suppress sales volumes.
“Material shortages are still a constraint on output in some cases. However, many manufacturers are accumulating stocks of finished goods as sales disappoint, which is a downside risk to the sector’s performance in the coming months as these firms look to bring output more into line with demand and scale back their purchasing activity accordingly.
"Amid an easing of imbalances across supply chains, cost inflation has retreated further from its recent historic highs. However, owing to the energy supply shock, cost pressures remain stubbornly high and have fresh upside risks in the coming months.
"Manufacturers are bearish about the outlook, but while we've seen the pace of job creation slow, there are no signs yet of the goods-producing sector going into retrenchment mode on the employment front."