Germany PMI September 2021


Germany: Composite PMI drops further in September

September 23, 2021

Private-sector operating conditions improved at a softer pace at the close of the third quarter, with the IHS Markit Composite Purchasing Managers’ Index (PMI) falling to a seven-month low of 55.3 in September from 60.0 in August. That said, the index remained markedly above the neutral 50-threshold that separates improving from deteriorating business conditions over the prior month.

The print reflected softer improvements in operating conditions in both the services and manufacturing sectors. The services sector lost momentum following the strong rebound in recent months when lockdown measures were relaxed. Meanwhile, the manufacturing sector suffered from weaker demand at home and abroad, and supply bottlenecks amid material shortages, which hindered growth in new orders. The supply-side constraints also drove a further build-up of backlogs of work at German firms. Turning to prices, higher costs for labor and energy, as well as for transportation and materials, drove a steep rise in input costs, but input inflation ticked down to a four-month low. Consequently, output price inflation also eased.

Phil Smith, associate director at IHS Markit, commented:

“September’s flash PMI survey showed a notable slowdown in the rate of growth of the German economy, in a sign that activity is beginning to level off after rebounding sharply over the summer.”

FocusEconomics Consensus Forecast panelists expect fixed investment to increase 4.3% in 2021, which is up 0.5 percentage points from last month’s forecast. For 2022, panelists see fixed investment growing 4.0%.

Author:, Economist

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