Germany: Flash PMI falls again but remains in expansionary territory in September
September 23, 2016
The Markit Flash Composite Purchasing Managers’ Index (PMI) decreased from 53.3 in August to 52.7 in September. 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.
A weaker PMI reading for service providers was once again the main driver behind the overall drop. In fact, activity in the services sector recorded the lowest reading in over three years. The manufacturing PMI on the other hand edged up, softening the fall of the Composite PMI. Output, new orders, and employment all grew solidly, albeit at a below-average pace. As for price developments, input costs and output charges both continued to rise.
IHS Markit commented on the result, stating that, “today’s survey data are a clear indication that German economic growth has slowed in the third quarter. While further GDP growth is expected, it is highly unlikely that the 0.7% rate seen at the beginning of the year will be repeated.”