Germany: Composite PMI eases in April but remains close to multi-year high
April 21, 2017
The Markit Flash Composite Purchasing Managers’ Index (PMI) fell to 56.3 in April, down from 57.1 in March, which had marked the highest reading in almost six years. The PMI—the result of a survey of over 1,000 manufacturing and service businesses based in Germany—has remained above 50, the threshold indicating expansion, since April 2013.
The drop was driven by a weaker PMI reading for services, while the manufacturing PMI remained broadly stable. In April, output and new orders continued to grow, albeit at a slower pace. New export orders grew at the fastest pace in six years, while backlogs of work increased for an eleventh consecutive month. As a result, German companies continued to hire new workers at a fast rate. Input prices increased for the twelfth consecutive month, but at a softer pace, principally as a result of higher commodity prices. Output prices also slowed somewhat, but output price inflation nevertheless remained strong.
IHS Markit commented that, “the German economy registered a strong start to the second quarter of 2017, according to the April flash PMI.”
Author: Christopher Mc Innes, Economist