Germany: Flash PMI moderates in June
June 23, 2016
Markit’s composite Purchasing Managers’ Index (PMI) fell from 54.5 in May to 54.1 in June. Thus, the PMI—the result of a survey of over 1,000 manufacturing and service businesses based in Germany—remained above the 50-threshold, where it has been since April 2013.
The print mainly reflected a lower PMI reading for service providers. In fact, the services PMI hit the lowest value in over a year. Conversely, the manufacturing PMI rose to the highest reading in over two years. The new order sub-index underlined the divergent dynamic in both sectors: while new orders growth picked up in the manufacturing sector, they decelerated in the services sector. However, the pace of job creation strengthened among both sectors. Meanwhile, payrolls rose and backlogs of work rebounded in June. A for price developments, input costs continued to rise and output charges were broadly stable.
Markit commented on the result, stating that, “although overall output increased at a slightly weaker rate, the survey results pointed to a further solid rise in second quarter GDP. It is likely, however, that economic growth will have slowed from the impressive figure posted for the start to the year. Panellists commented that a positive economic environment and rising demand from some key export markets such as China and the US had a positive impact on economic growth. Moreover, latest labour market data suggest that companies are confident about future workloads, while the outcome of the UK’s EU referendum does not seem to have an impact on hiring or investment decisions.”