Germany PMI manufacturing dropped to 49.9 in January, down from 51.5 and missed expectation of 51.5. That’s the lowest in 50 months. PMI services rose to 53.1, up from 51.8 and beat expectation of 52.2. PMI composite rose to 52.1, up from 51.6.
Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said:
“The Germany PMI broke its recent run of successive falls in January thanks to a stronger increase in service sector business activity, but the growth performance signalled by the index was still one of the worst over the past four years.
“Worryingly for the outlook, the recent soft patch in demand continued into the New Year. Firms are also showing greater caution towards hiring with job creation at a 25-month low, though in a historic context these are still healthy employment figures.
“Manufacturing fell into contraction in January as the sector’s order book situation continued to worsen, showing the steepest decline in incoming new work since 2012. Weakness in the auto industry was once again widely reported, as was a slowdown in demand from China.
“Manufacturers saw some respite in the form of weaker cost pressures, as the rate of input price inflation in the sector cooled to a 27-month low, partly due to the recent correction in oil prices. Service providers, meanwhile, highlighted the impact of wage pressures which contributed to steeper increases in both their overall costs and selling prices.”
