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German private sector output growth eases in July

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Staff Writer |
German private sector
Germany   IHS Markit Flash Germany PMI

German private sector output growth slowed for the second month running in July but remained strong overall, according to flash PMI survey data from IHS Markit.

The overall rate of expansion was the weakest since January, a trend reflected in both manufacturing output and services business activity.

Similarly, new business inflows increased at the softest rate since the start of 2017.

That said, job creation quickened during the month and outstanding business continued to grow solidly, reflecting manufacturing backlogs.

Moreover, firms remained as optimistic regarding output expectations in July as they had been in June.

The IHS Markit Flash Germany Composite Output Index registered 55.1 in July, down from 56.4 in June and indicating the slowest rate of expansion since January.

That said, growth remained strong overall and above the long-run series average.

Output has risen continuously since May 2013, the second-longest sequence of growth since the series started in January 1998.

Manufacturing output continued to expand at a faster rate than service sector activity.

The pace of growth slowed to a six-month low, but was nonetheless sharper than those registered from May 2014 to January 2017.

Services output also increased at the weakest pace since January, and one that was broadly in line with the long-run survey average.

New business received by German private sector firms increased for the thirty-first consecutive month in July.

The rate of expansion remained strong but, as with total activity, slowed to the weakest since January.

New business at service providers rose at the softest pace since September 2016, while manufacturing new order growth reached a fivemonth low despite a slightly sharper increase in new export contracts.

Manufacturers continued to report high demand from markets in both Europe and Asia.

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