Manufacturing drives German growth to near-three year high
The Markit Flash Germany Composite Output Index rose from January’s fourmonth low of 54.8 to 56.1, the highest since April 2014 and signalling strong growth in the eurozone’s largest economy. Output has risen continuously since May 2013.
The rate of growth in manufacturing output accelerated for the third successive month in February to the highest since January 2014.
Meanwhile, the rate of expansion in services activity picked up from January’s four-month low and was broadly in line with the solid trend shown during the past three years.
Similar trends were evident for incoming new business. Manufacturing new order growth hit a 37-month high and outpaced the increase in service sector new business for the tenth month running.
The rate of growth in services new work nevertheless accelerated to a 12-month record.
In manufacturing, stronger growth in both output and new orders as well as the greatest lengthening in suppliers’ delivery times since June 2011 drove the headline PMI figure to its highest since May 2011.
Meanwhile, new export orders rose at the fastest rate since January 2014.
Data on outstanding business revealed rising capacity constraints in the German private sector economy.
The rate of accumulation in incomplete work reached the fastest since June 2016, with a further marked increase in the goods-producing sector.
Backlogs in manufacturing have been rising since February 2015.
Reflecting stronger growth in output and new business, employment at German private sector companies increased further in February.
Moreover, the rate of job creation strengthened to the highest since June 2011.
Strong workforce growth was evident in both manufacturing and services.
February data signalled a further intensification of inflationary pressure.
Input price inflation accelerated for the sixth consecutive month to the highest since May 2011.
Cost pressures in manufacturing were especially marked, linked to higher prices for metals and oil-based products in particular and also the weak euro.
Service providers mainly linked greater input costs to salaries and fuel. ■
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