Germany PMI Manufacturing rose slightly to 43.6 in August, up from 43.2 and beat expectation of 43.0. PMI Services dropped to 54.4, down from 54.5, but beat expectation of 54.0. It’s nevertheless a 7-month low. PMI Composite improved to 51.4, up from 50.9.
Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said:
“Germany remains a two-speed economy, with ongoing growth of services just about compensating for the sustained weakness in manufacturing. Although improving slightly, the survey’s output data haven’t changed enough to dispel the threat of another slight contraction in GDP in the third quarter, especially given the deterioration in the forward-looking indicators.
“The headline services business activity index has come down a touch but remains indicative of a robust pace of output growth in that sector. However, cracks are starting to appear elsewhere in the services data, with inflows of new work barely rising in August and business confidence at its lowest for almost five years. Manufacturing expectations have also taken a turn for the worse, and are now at a record low.
“The sustained weakness in demand continues to filter through to the jobs market. Employment growth has now almost stalled, reflecting falling capacity pressures and lower business confidence generally.”
