The continuing deterioration in the euro crisis is also putting the German economy under increasing pressure – this trend can also be seen in figures on the purchasing behaviour of companies in Germany, which the Bundesverband Materialwirtschaft, Einkauf und Logistik (BME, or German Association Materials Management, Purchasing and Logistics) has recently submitted. According to the seasonally adjusted Markit/BME purchasing managers’ index (EMI), both domestic and foreign demand is falling. Not only did industrial production contract in June for the fourth month in a row, the falls in growth were even more serious than in May. The current EMI dropped 0.2 points to 45.0, thus sliding to the lowest level since June 2009. This early indicator, which enjoys great international recognition, has not moved for so long under the neutral growth mark of 50 points since the turn of the year in 2008/2009.

According to the information from the BME, the important sub-indices that have been moving downwards for months include production, orders received and sales prices. Thus, primarily due to a lack of new and follow up orders, German industrial businesses scaled back their production strongly in the report month for the third time. At 44.8 the sub-index output was only slightly higher than the 35 month low in May (44.6). Slowing domestic and foreign demand resulted in a decline in orders for the twelfth time in a row. The sub-index orders received is moving well below its long term average of 52.6 points at 44.4 currently (May: 43.8).Weak worldwide demand for semi-finished products and raw materials also left a strong decline in purchasing process in the industrial sector in its wake (42.8 after 51.5 in May). This has caused companies to lower their prices slightly for the first time in nearly two and a half years (49.4 in June after 51.3 in the previous month).

The index of producer prices for commercial products was 6.4 per cent higher in February 2011 than in February 2010. As the German Federal Statistical Office (Destatis) reported further, the last time there was a higher rate of change was in October 2008 (+ 7.3 per cent). The index rose by 0.7 per cent in February 2011 compared with the previous month January. Price increases for energy were responsible for a good half of the total rise in February 2011. Energy prices were 11 per cent higher than in the previous month. Without taking energy prices into account, producer prices were 4.5 per cent higher in February 2011 than in February 2010.

The prices for input goods – i.e. goods that are used, processed or converted in production processes – rose by 8.5 per cent in one year, thus reaching a new peak. Prices for metals primarily contributed to the high rate of change. They were 22.4 per cent higher than twelve months before. For example, rolled steel was 30.3 per cent more expensive than in February 2010.