Germany: Flash PMI picks up slightly in August, points to expansion
August 24, 2015
Markit’s composite Purchasing Managers’ Index (PMI) advanced slightly from July’s 53.7 to 54.0 in August. As a result, the composite PMI—the result of a survey of over 1,000 manufacturing and service businesses based in Germany—moved a bit further above the 50-threshold, where it has been since April 2013.
August’s minor improvement came on the back of faster output growth at manufacturers, while output growth at service providers moderated marginally. According to Markit, new orders also expanded at a faster pace than in July, with manufacturers registering stronger gains than service providers, and new export orders also continued to rise in August. In addition, employment recorded another expansion, with the pace of job creation speeding up to the fastest in 44 months. Backlogs of work rose at the sharpest pace in 19 months and outstanding business recorded the first increase since March. Regarding price developments, input costs continued on the rise, but the rate of input price inflation fell to a six-month low and output charges also increased in August.
Markit commented on the result, stating that, “Germany’s private sector economy shifted into a higher gear in August, with output and new orders both increasing at the sharpest rates in four months. Moreover, the survey data highlighted that workers continued to feel the benefit of stronger demand [..]. Encouragingly, manufacturers reported accelerated production growth, adding to signs that Germany’s goods-producing is in a better shape than last quarter, when official data signaled only a fractional increase in manufacturing output. Meanwhile, service providers continued to record above-average growth too.”