Germany: Composite PMI ticks up in November
November 23, 2021
Operating conditions improved at a stronger pace in November, with the IHS Markit Composite Purchasing Managers’ Index (PMI) rising to 52.8 from 52.0 in October. As such, the index moved further above the neutral 50-threshold that separates improving from deteriorating business conditions over the prior month.
The uptick came on the back of a pickup in services sector activity and output. That said, demand in the services sector stalled amid lingering uncertainty surrounding the pandemic and supply-side issues, while manufacturing demand was dented by supply bottlenecks, input shortages and dropping demand from the automotive sector. Nonetheless, employment grew robustly as firms sought to alleviate capacity constraints and prepared for an expected strong rebound in the months ahead. Input prices, meanwhile, rose at an unprecedented pace amid supply bottlenecks, material shortages, higher energy costs and greater wage bills. Consequently, firms increased their output prices, which rose at a record pace.
Commenting on November’s reading, Lewis Cooper, economist at IHS Markit, added:
“The flash PMI data for November point to a general levelling off of the economic growth slowdown seen across the German private sector over the previous three months. […]. Overall, the flash PMI data point to a slightly improved trend for business activity, but supply delays and inflationary pressures remain a key cause for concern and are likely to weigh further on growth in the coming months, especially if these constraints further stifle demand.”
Author: Jan Lammersen, Economist