Mubasher: German manufacturing activity recorded its worst level since the global financial crisis, as a downturn in output and new business gathered momentum.

Manufacturing purchasing managers index (PMI) for the sector was 41.7 in September, dropping from a reading of 43.5 recorded in August, according to data released jointly by IHS Markit and BME on Tuesday.

This reflected the weakest performance in the sector observed since June 2009.

Investment goods producers were the worst performers during the month.

Output continued to decline for the eighth straight month, at the quickest pace recorded since July 2012, while new order intakes slowing down to the sharpest level since April 2009.

Manufacturers tended to scale back workforce, as the pace of staff shedding was the fastest since January 2010, while the employment rate was seen at the lowest level in seven months.

“The severity of the job losses across manufacturing we are now seeing could start to weigh more heavily on consumer confidence, which up to this point has been relatively resilient,” IHS Markit’s principal economist Phil Smith said.

Manufacturers remained strong pessimistic about the outlook, even with a slight pickup in the expectations from the seven-year trough in the preceding month.

By 9:35 am GMT, the EUR/USD pair ticked down by 0.01% to $1.0898.