Germany: Composite PMI improves mid-way through Q4
November 23, 2017
The IHS Markit flash composite Purchasing Managers’ Index (PMI) rose in November to 57.6, up from the previous month’s revised 56.6 (previously reported: 56.9). The PMI, which is the result of a survey of over 1,000 manufacturing and service businesses based in Germany, has been above the crucial 50-threshold since April 2013, indicating ongoing expansion in the private sector.
The result was led by a pick-up in the manufacturing sector; new orders rose at the quickest pace in over six-and-a-half years. New orders from abroad rose at the second-fastest pace in the history of the survey. Because of the increase in activity, backlogs of work accumulated, leading companies to increase their payrolls by taking on more staff. Employment grew at a multi-year high level. The services sector, furthermore, also expanded in the same month and at a slightly quicker pace than in the previous month. Increased input price costs were passed on to consumers as output prices rose at the quickest pace in six-and-a-half years.
Phil Smith, Principal Economist at IHS Markit, commented that, “The German economy is going great guns […]. A theme across the survey, however, is intense pressure of capacity. […] Anecdotal evidence paints a picture of a lack of resources and low stock levels among suppliers, as well as widespread constraints across the transport sector.”
Author: Jan Lammersen, Economist