Germany PMI Manufacturing was finalized at 64.4 in May, down from April’s 66.6. Rates if output and new order growth softened further from recent highs. Nearly 79% of German manufacturers reported longer input lead-times. Input cost inflation surged to record high.
Phil Smith, Associate Economics Director at IHS Markit, said: “May’s PMI survey indicates that, while still strong by historical standards, the pace of growth of Germany’s manufacturing sector is being held back by supply constraints.
“The disruption from supply shortages has continued to spread, with now almost four-in-five manufacturers reporting increased lead times on inputs and a growing number also citing an impact on output and new orders due to forced downtime.
“The disruption to supply comes hand in hand with a further surge in cost pressures, with 90% of manufacturers – far more than ever before in the survey’s 25-year history – reporting increased input prices in May. Strong demand fundamentals mean that manufacturers are able to pass on some of the burden of higher costs through unprecedented price increases of their own.
“Reassuringly, manufacturers continue to look past the current supply issues, with business expectations for activity over the year ahead sticking close to record highs and the pace of hiring continuing to accelerate as factories show an increased urgency to expand capacity. Although a symptom of the current supply issues, the successive record increases in backlogs of work bode well for output levels in the coming months as firms try to catch up.”
