By Maria Martinez
BERLIN (Reuters) - The downturn in Germany's manufacturing sector, which accounts for about a fifth of Europe's biggest economy, continued to gather pace in July, a survey showed on Thursday.
The HCOB final Purchasing Managers' Index (PMI) for German manufacturing fell to 43.2 in July from 43.5 in June, above a preliminary flash estimate of 42.6 and remaining below the 50 level that separates growth from contraction.
The current 25-month sequence of sub-50 readings is the longest on record since 1996, the report said.
"Germany's industry is off to a rough start in the second half of the year," said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. "A manufacturing recovery probably won't happen before autumn."
The main factor behind the drop in the headline PMI in July was a sharp and accelerated reduction in output, which reflects ongoing weakness in demand across the sector, according to the report.
Goods producers were therefore less optimistic about their growth prospects for the year ahead.
Due to the sharp drop in production and new orders in manufacturing, Hamburg Commercial Bank has cut its growth forecasts for the German economy to 0.2% for this year, down from a previous forecast of 0.5% growth.