January saw Germany’s manufacturing sector grow further, although the pace of expansion was the slowest since last October. This was highlighted by the seasonally adjusted Markit/BME Germany Manufacturing Purchasing Managers’ Index® (PMI® ) – a single-figure snapshot of the performance of the manufacturing economy – falling from December’s 53.2 to 52.3.
That said, the latest index reading was broadly in line with the 2015 average (52.1). Latest survey results signalled a slowing in the rate of production growth at German manufacturers, largely a result of stagnating output at intermediate goods producers. Meanwhile, consumer and investment goods manufacturers reported further solid growth.
Mirroring the trend for output, new business also rose at weaker rate at the start of 2016. In fact, the increase in new business was the least marked in four months. Weaker demand from export markets was one of the reasons for the slowdown in total new business. However, some panellists reported that the weak euro and improved demand from the US helped secure higher new export orders. Increased new order intakes meanwhile led to a further accumulation of unfinished business.
The latest rise in backlogs of work was the weakest in three months, however. Meanwhile, postproduction inventories fell for the third month running. In response to ongoing pressure on operating capacity, manufacturers raised their employment further during the month. The rate of job creation was the sharpest since last August, with particularly strong growth reported at consumer goods producers.
