Germany: Flash PMI moderates but remains strong in December
December 15, 2016
The Markit Flash Composite Purchasing Managers’ Index (PMI) edged down from 55.0 in November to 54.8 in December. 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 three-month low. The effect of the drop on the overall index was cushioned by an almost three- year- high manufacturing reading. In December, output and new orders continued to grow, as did export orders. As a result, both employment and backlogs of works also rose solidly. Given higher input prices, the surveyed businesses reported higher output prices, which in December grew at the fastest pace in over five years.
IHS Markit sees the result as strong sign that, “with readings for October and November also pointing to marked output growth, the data suggest that the rate of GDP expansion is likely to have accelerated in Q4 from the disappointing 0.2% in the third quarter.”
Author: Christopher Mc Innes, Economist