Germany PMI December 2021


Germany: Private sector operating conditions remain unchanged over the previous month in December

December 16, 2021

The IHS Markit Composite Purchasing Managers’ Index (PMI) came in at 50.0 in December, down from 52.2 in November and logging the worst result in 18 months. As such, the index landed on the neutral 50-threshold that separates improving from deteriorating business conditions over the prior month.

December’s deterioration came chiefly on the back of declining activity in the services sector, due to surging new Covid-19 cases domestically, which weighed on new business. Conversely, manufacturing activity picked up pace as output expanded at the sharpest rate in three months, on somewhat easing supply chain disruptions and rising new orders. Meanwhile, business sentiment improved amid expectations of positive developments in the health crisis in 2022, while employment levels rose. On the price front, both input and output costs remained elevated, although price growth eased somewhat, with the highest price pressures recorded in the manufacturing sector.

Commenting on December’s reading, Phil Smith, economics associate director at IHS Markit, said:

“The German economic recovery was stopped in its tracks in December by the resurgence of the pandemic, as renewed restrictions and increased uncertainty dampened activity across the country’s service sector. However, despite the somewhat gloomy headline number, there were a number of more positive takeaways from December’s flash survey, including an uptick in manufacturing growth and resilient business confidence.”

FocusEconomics Consensus Forecast panelists expect fixed investment to increase 4.1% in 2022, which is unchanged from last month’s forecast. For 2023, panelists see fixed investment growing 2.9%.

Author:, Economist

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