In Las Palmas they are worried about the progress of tourism in the south of Gran Canaria and the alarms have started in Germany, a market that until last March was blessed at the ITB fair in Berlin. The fact is that the tourism that comes to the south of the island is made up of families of civil servants and the manufacturing sector. Gran Canaria business morale is on par with that of Germany, which worsened for the second consecutive month in June, a survey showed on Monday, indicating that Europe's largest economy faces an uphill battle to emerge from recession. The Bundesbank said in June in its monthly report that the recession in Germany is expected to end in spring, with a slight increase in gross domestic product in the second quarter.
What truth is there that alarms are going off in the south of the island? Conditions in the manufacturing sector have certainly worsened, but this is not a collapse. New orders have started to fall from very high levels and manufacturers have not yet resorted to job cuts. However, expectations about production prospects for next 2024 hit their lowest level since last November, as companies surveyed cited numerous obstacles to growth. A recession in this sector, which was still expanding in the first quarter according to GDP statistics, has become much more likely.
And Germany's manufacturing sector contracted at the fastest pace in more than three years in June, with both output and new orders falling, HCOB's final Purchasing Managers' Index (PMI) showed on Monday. Manufacturing, which accounts for about a fifth of Germany's economy, fell to 40,6 from 43,2 in May, the fifth straight monthly drop. The manufacturing PMI has been below the 50 level that separates growth from contraction since July 2022. German manufacturing companies reported deeper cuts to production levels at the end of the second quarter, in response to a sustained weakening of demand , according to the report.
