German factory activity slumps to an 18-month low as the impact from the Russia-Ukraine war is felt rather strongly by Europe's largest economy. Output and new orders slumped while input cost inflation surged amid a round of fresh supply disruptions. S&P Global notes that:
"We're already beginning to see the effects of the war in Ukraine on the German economy, particularly in the manufacturing sector where growth has started to wane and there's been a considerable loss of business confidence.
"Manufacturers have been hit by dual supply and demand shocks. Fresh disruption to raw materials and key components has constrained production, while the war-related sanctions and heightened uncertainty in the market have dented export sales. On top of this, goods producers have come under renewed pressure from rising input cost inflation, which accelerated for the first time in five months in March amid sky-rocketing global commodity prices.
"March survey data has shown a near-unprecedented drop in manufacturers' expectations for the year ahead, which not only bodes ill for the immediate growth outlook, but also for future job creation and investment."
