Germany's manufacturing sector remained firmly in contraction at the start of the final quarter of the year, according to the latest PMI data from IHS Markit and BME.
October saw further marked albeit slower decreases in both output and new orders, while employment dropped to the greatest extent since January 2010 and destocking efforts intensified.
Average factory gate prices meanwhile fell at the fastest rate in almost a decade in October, reflecting the combination of lower input costs and greater competition for new work.
The headline IHS Markit/BME Germany Manufacturing PMI registered 42.1 in October, up slightly from 41.7 in September but still the second-lowest reading since June 2009.
Data showed a deterioration in operating conditions across each of the main industrial groupings, led by a steep contraction in the capital goods sub-sector which includes mechanical engineering and transport equipment.
Surveyed businesses reported a backdrop of uncertainty weighing on investment and leading to a general reluctance among clients.
New orders fell markedly and for the thirteenth month in a row in October.
That said, the rate of decline slowed since September when it reached the quickest since early-2009 to the weakest in four months.
This was also the case for export sales.
The rate of decline in manufacturing output likewise eased, but nevertheless remained one of the fastest seen since the financial crisis of 2008/9.
By contrast, the pace of job shedding across the sector continued to accelerate at the start of the fourth quarter, reaching the quickest since January 2010.
As has been the case in recent months, firms that reported lower staffing number mostly attributed this to a reduction in temporary/contract workers.
Manufacturers reported another steep reduction in buying levels in October.
This was partly due to intensifying efforts to scale down stocks of purchases, which fell at the fastest rate since November 2009.
Post-production inventories also decreased more sharply, dropping the most since July.
Lower demand for inputs was reflected in both a notable improvement in supplier lead times the most marked in four months and a further drop in prices paid for purchases.
The extent to which input costs fell was the greatest since March 2016, as a number of firms reported lower prices paid for metal components, raw steel and plastics.
These cost savings were passed on by manufacturers in the form of a fourth straight monthly decrease in factory gate charges.
Moreover, the rate of decline was the fastest seen since November 2009.
Lastly, latest data showed manufacturers' expectations towards future output recover to a four-month high.
Nevertheless, sentiment remained negative overall. ■