German PMI manufacturing dropped to 58.4 in March, down from 60.6, below expectaiton of 59.8. That’s an 8-month low.
German PMI services dropped to 54.2 in March, down from 55.3 and missed expectation of 55.0. That’s a 7-month low.
Here is the full release: Germany PMI drops to eight-month low in March.
Quote from Phil Smith, Principal Economist at IHS Markit:
“Growth in Germany’s private sector has pulled back sharply since the start of the year, with the pace of expansion in March well below January’s near seven-year high.
“However, with the strong expansions seen at the end of last year and in the opening months of 2018 already baked in, official numbers are expected to show robust GDP growth in the opening quarter. Latest IHS Markit forecasts show growth picking up from the somewhat disappointing 0.6% seen in the fourth quarter of 2017.
“Interestingly, the survey’s anecdotal evidence also found an unusually high prevalence of staff sickness affecting business activity, to suggest that the extent of the slowdown in March might be partly due to temporary factors.
“It is manufacturing that has lost the most momentum, with growth in goods production slowing particularly sharply to its weakest since the start of 2017. The headline manufacturing PMI, however, is somewhat supported by the suppliers’ delivery times component, which has hit a fresh record-low – its third in the past four months.
“Capacity pressures remain a theme, with firms noting not only bottlenecks in supply chains but also a solid and accelerated increase in backlogs of work. This bodes well for strong job creation continuing in the months ahead.”
Eurozone PMI composite at 55.3, 14-month low; Growth peaked around the turn of the year
Eurozone PMI manfucturing dropped to 56.6 in March , down from 58.6, below expectation of 58.1. That’s lowest in 8 months.
Eurozone PMI services dropped to 55.0, down from 56.2, below expectation of 56.0. That’st lowest in 5 months.
Eurozone PMI composite dropped to 55.3 down from 57.1, loweset in 14 month.
Here is ther release Eurozone expansion slows to weakest since start of 2017
Quote from Makit Chief Business Economist Chris Williamson:
“While the first quarter average PMI reading remains relatively robust, indicative of GDP rising by 0.7-0.8%, the loss of momentum since the buoyant start to the year has been quite dramatic.
“At least some of the slowing may be ascribed to bad weather in some northern regions and, perhaps more importantly, ‘growing pains’ resulting from the strength of the recent growth spurt. Supply chain delays and raw material shortages were often reported to have stymied production in manufacturing (delays in German supply chains are currently more widespread than at any time in the survey’s 22-year history), and both manufacturing and services sectors also saw activity being curtailed by growing incidences of skill shortages. Backlogs of work continue to rise as a result of these growth constraints.
“However, other factors are clearly at play. The fact that export order book growth has more than halved since the end of last year suggests the stronger euro is taking an increasing toll on export performance. Survey responses also highlighted how political uncertainty also appears to have intensified, dampening demand.
“The data therefore suggest that eurozone growth peaked around the turn of the year and the region is settling into a slower, but still robust pace of expansion. Price pressures have meanwhile also eased slightly, in part linked to cheaper imports arising from the euro’s recent strength, but remain elevated.”