Germany PMI

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Germany: Flash PMI moderates in May; still points to expansion

May 21, 2015

Markit’s composite Purchasing Managers’ Index (PMI) in May moderated from April’s 54.1 to a five-month-low of 52.8. Nevertheless, the composite PMI—the result of a survey of over 1,000 manufacturing and service businesses based in Germany—remains above the 50-threshold, where it has been since April 2013.

May’s moderation came of the back of slower output at both service providers and manufacturers. According to Markit, new business and new export orders expanded at a slower pace than in the previous month. Conversely, the employment grew over the previous month, with a slight pickup in the rate of job creation, and backlogs of work fell for a second straight month. Cost pressures rose, as input costs registered a significant increase and companies again raised their output charges in May.

Markit commented on the result, stating that, “May’s flash PMI results signalled a further slowing in economic growth in Germany’s private sector. Companies reported weaker expansions in both output and new orders, with some survey participants commenting on weak demand, economic uncertainties and rising cost pressures. […] While the survey data are consistent with further GDP growth heading into the middle of the year, it looks as if this rate of expansion of the German economy will remain sluggish in the months ahead.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 2.2% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect fixed investment to grow 3.4%.


Author: Teresa Kersting, Economist

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Germany PMI May 2015

Note: Markit Purchasing Managers’ Index (PMI) Composite Output. A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: BME and Markit.


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