Germany: Composite PMI moderates but manufacturing PMI rises to three-year-high in January
January 24, 2017
The Markit Flash Composite Purchasing Managers’ Index (PMI) edged down from 55.2 in December to 54.7 in January. 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 marginally lower result was driven by a softer PMI reading for services, which came in at a four-month low. The effect of the drop on the overall index was cushioned by a three-year-high manufacturing reading. In January, output and new orders continued to grow. As a result, employment grew strongly, while backlogs of work only rose slightly. Input prices increased at their fastest pace in over five years but these prices increases were not passed on entirely to customers, resulting in softer output price inflation in January.
IHS Markit commented that, “the first flash PMI of 2017 highlighted diverging performance in Germany’s private sector economy. Whereas manufacturers signalled an accelerating upturn fuelled by stronger domestic and international demand, growth slowed in the dominant service sector.”
Author: Christopher Mc Innes, Economist