Germany: Flash PMI moderates but remains strong in November

The Markit Flash Composite Purchasing Managers’ Index (PMI) edged down from 55.1 in October to 54.9 in November. 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 result was driven by a lower PMI reading for manufacturers, which was cushioned by a 6-month high services PMI reading. In November, output and new orders continued to rise. New export orders rose sharply, while employment and backlogs of work also continued to grow steadily. An increase in both input prices and output charges suggests an increase in inflationary pressures.

IHS Markit sees the result as strong sign that, “although the PMI failed to further build on October’s ten-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape in November. Moreover, the data suggest that economic growth has picked up from the meagre 0.2% rate in the third quarter.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.4% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists expect fixed investment to grow 1.9%, which is unchanged from last month’s projection.