German manufacturing is beginning to be seriously affected by the slow downs in other euro area countries.  German Manufacturing and Mining Sales declined 2.9% in September from August and were 2.5% below September of a year ago. New orders declined 3.3% in September and were 4.6% below September 2011.  Total sales and new orders are shown in the first chart.  The major factors affecting the decline in sales and new orders were sales to, and new orders from, fellow euro area countries. Foreign sales and new orders in the euro area  fell 7.4%  and 9.6%, respectively, in September from August. and 9.7% and 13.0%, respectively,  from September of 2011. The sales and new orders of the foreign euro area  are shown in the second chart. 

Foreign sales and new orders in the non Euro Areas fared much better.  Sales and new orders to these areas fell only 1.5% in September from August and both were higher than a year ago--the only areas to show year to year  increases.  Foreign sales to non euro areas were 4.8% above September of 2011 and foreign new orders from non euro areas were 3.4% above September, 2011.    Domestic sales declined 2.0% in September from August and were 2.4% below a year ago.  Domestic new orders were down 2.0% in September and were 6.4% below September 2011.

Another indicator, released today, suggesting that German manufacturing is slowing is the diffusion index of German purchasing managers in manufacturing. This indicator fell to 46.0 in October from 47.4 in September. There has also been a small increase in the registered unemployment rate from 6.8% in August to 6.9% in September and October.  Though it is small, it is the first increase in this measure since mid 2009.