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Solid service sector growth, slowing manufacturing in Germany

Staff writer ▼ | March 23, 2016
The latest survey data signalled a continuation of output growth at German private sector companies at the end of the first quarter.
German service sector
Germany   Markit Flash Germany PMI
This was highlighted by the Markit Flash Germany Composite Output Index remaining above the neutral 50.0 threshold.

At 54.1, however, the index was unchanged from February's five-month low. While solid growth of activity was maintained in the service sector, manufacturers reported the lowest rise in output since November 2014.

The amount of new business received by private sector firms in Germany increased at the weakest rate in eight months during March, with slower growth recorded at both manufacturers and service providers.

Some panel members commented on declining demand from international clients, with specific mentions of Asia and the US. That said, manufacturers reported a stagnation of new export orders, thereby ending a seven-month sequence of expansion.

Employment growth was maintained in March, although the rate of job creation slowed for the third month running and was the weakest in nearly a year. Moderate jobs growth in the service sector contrasted with continued cuts at goods producers.

The weaker expansion was attributed by some panellists to the end of temporary contracts.

Latest survey data signalled an eighth successive monthly rise in business outstanding. However, the rate of backlog accumulation was marginal overall, partly due to slower growth in new orders, according to survey evidence.