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Germany PMI May 2023

Germany: Composite PMI rises to over one-year high in May

The HBOB Composite Purchasing Managers’ Index (PMI) rose to 54.3 in May from April’s 54.2. May’s result marked the strongest reading since April 2022. As a result, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in private sector operating conditions compared to the previous month.

The manufacturing PMI came in at 42.9 in May, down from April’s 44.5 and a three-year low. Lastly, the services PMI increased to 57.8 in May (April: 56.0), a nearly two-year high.

The print suggests a less dark outlook for economic activity than had been expected at the start of the year. Business activity improved for the fourth consecutive month, driven by the services sector. Less positively, new orders in the services sector grew at a weaker rate, and in the manufacturing sector, both output and new orders fell. Meanwhile, across both sectors as a whole, workforce numbers grew at a softer rate. Looking at prices, input inflation fell in both the services and manufacturing sectors, while output inflation rose in the services sector and fell in the manufacturing sector.

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