Companies noted a further slowing of new order growth in May, with the pace of expansion only marginal overall. Sector data suggested that investment goods producers saw new business falling, while expansions were reported at consumer and intermediate goods manufacturers.
Meanwhile, new export orders rose for a fourth month running, with the rate of growth unchanged from April’s modest pace. Some panellists linked increased new export business to the weak euro. Mirroring the trend for total new orders, output at German manufacturers increased at the slowest pace in 2015 so far. Surveyed companies attributed the weaker expansion to subdued demand.
Survey data signalled an eighth successive monthly rise in employment levels in May. However, the rate of job creation slowed to a three-month low and was only fractional overall. Meanwhile, backlogs of work accumulated further, signalling ongoing pressure on operating capacity in the sector.
The rate of backlog accumulation was the secondstrongest in just over a year. Manufacturers remained cautious about their stock policies in May. This was signalled by further reductions in both pre- and post-production inventories. Nevertheless, companies slightly raised their purchasing activity in response to increased new order intakes. The rate of growth in input buying was unchanged from April’s marginal pace.
