Germany: Composite PMI inches back up to multi-year high in May
May 23, 2017
The Markit Flash Composite Purchasing Managers’ Index (PMI) rose to 57.3 in May, up from 56.7 in April, marking the highest reading in over 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 rise was driven by a stronger manufacturing PMI reading, while the services PMI eased somewhat. In May, output and new orders grew at a faster pace. New export orders grew at the fastest pace in seven years, while backlogs of work increased at the steepest rate in six years. As a result, German companies continued to hire new workers at a faster rate, also at a six year high. Input price inflation continued to ease as a result of a strengthening euro. Output prices accelerated.
IHS Markit commented that, “The flash PMI data for May signalled no let-up in German economic growth,” and that, “PMI data for the first two months of the second quarter are signalling continued positive momentum. This supports IHS Markit’s view of growth in the coming quarters remaining strong.”
Author: Christopher Mc Innes, Economist