Brandenburg Gate in Berlin, Germany

Germany PMI March 2022

Germany: Composite PMI inches down in March

The S&P Global Flash Germany Purchasing Managers’ Index (PMI), produced by IHS Markit, eased to 54.6 in March from February’s 55.6 reading. As such, the index remained well above the 50-threshold and continued to signal a robust improvement in business conditions from the prior month, despite the war in Ukraine.

The moderation came on the back of a slowdown in the manufacturing sector, with growth easing to the weakest rate since December 2021 due to supply-chain disruptions and cooling demand on the back of Russia’s invasion of Ukraine. Furthermore, the Covid-19 pandemic also continued to impede increasing productive capacity as staff absences further weighed on output. Activity in the services sector grew at a solid pace thanks to greater easing of pandemic-related restrictions, although the rate of expansion eased due to greater inflation, a high Covid-19 case count and geopolitical issues. All in all, new orders growth eased in part on the back of softer foreign demand, while backlogs of work rose at the softest pace in four months. Turning to prices, the imbalances between supply and demand drove another upturn in prices in conjunction with surging energy and fuel prices: Input price inflation recorded its highest level on record, while output price inflation also shattered the prior record.

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