Germany: Composite PMI moderates in June
The S&P Global Flash Germany Purchasing Managers’ Index (PMI) eased to a six-month low of 51.3 in June from 53.7 in May. That said, the index remained above the 50-threshold that signals an overall improvement in business conditions compared to the prior month. The pace of improvement slowed, however, as the war in Ukraine dragged on operating conditions.
The headline moderation was driven by a loss of momentum in the services sector, as demand cooled and some firms experienced staff shortages, while manufacturing output contracted for the month. That said, output of goods and services was supported by a backlog of work,. New orders dipped for the first time in a year, hurt by inflation and weakened demand due to the war and Covid-19 lockdowns in China. Some easing of supply chain issues, however, saw manufacturing input price inflation cool to the lowest level in 16 months. Conversely, service sector prices increased at a stellar pace due to higher energy and fuel prices, as well as an increased wage bill and higher borrowing costs. That said, growth in output prices for goods and services eased for the second month running. Lastly, job creation slowed to a 15-month low, likely influenced by a more uncertain economic backdrop.