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German private sector increased

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Christian Fernsby ▼ | January 27, 2020
January saw a welcome, albeit modest, upturn in business activity across Germany’s private sector, according to the latest PMI survey data.
German car factory
Business in Germany   The headline Flash Germany Manufacturing PMI climbed
IHS Markit’s Flash Germany Composite Output Index registered 51.1 at the start of the year, up from 50.2 in December and its highest since last August.

Topics: German private sector

Other positive developments highlighted by the survey in January included a return to growth of new orders, a faster rate of job creation and improved business confidence towards the outlook for activity over the coming year.

Data at the sector level showed growth of services business activity accelerating to a strong rate that was the fastest for five months, alongside an easing of the rate of decline in manufacturing production to the weakest since August last year.

The headline Flash Germany Manufacturing PMI climbed to an 11 month high of 45.2 in January, up from December’s 43.7.

The latest reading was still firmly in contraction territory, but signalled the overall rate of decline in manufacturing easing for the third time in the past four months.

New business across Germany’s private sector rose for the first time in seven months in January.

Though only modest, the rate of growth was the quickest since October 2018.

As well as indicating a faster rise in service sector new business, flash data showed manufacturing new orders falling only modestly and at the slowest rate for 15 months.

These trends partly reflected an easing drag from external demand, with service providers reporting new business from abroad nearing stabilisation and goods export orders posting the smallest fall in the current 17-month sequence of decline.

The positive trends in output and demand extended to employment.

The pace of job creation in January was the quickest seen for five months, buoyed by stronger growth in services workforce numbers.

That said, another marked round of staff cuts across manufacturing weighed on the overall increase in employment, which was only modest by historical standards.