Flash Germany Composite Output Index(1) at 54.3 (53.5 in January), 7-month high.
Flash Germany Services Activity Index(2) at 55.5 (54.0 in January), 5-month high.
Flash Germany Manufacturing PMI(3) at 50.9 (unchanged from January).
Flash Germany Manufacturing Output Index(4) at 52.0 (52.3 in January), 2-month low.
Summary: Private sector activity growth in Germany accelerated further in February, as highlighted by the seasonally adjusted Markit Flash Germany Composite Output Index rising from January’s 53.5 to a seven-month high of 54.3. Survey participants commented that strong order intakes and a positive economic environment contributed to the latest increase in output. Activity growth strengthened at service providers, but eased slightly at manufacturers. February data signalled the second successive monthly rise in new orders placed with German private sector companies, following a short downturn at the end of last year. The increase in new work was the most marked in five months, but below levels seen throughout much of 2014. Some panellists linked increased client demand to a weaker euro, improving economic conditions and a pick-up in new export work. Indeed, manufacturing companies reported increased client demand from foreign markets in February. The rate of growth was, however, marginal. Private sector employment in Germany rose for the sixteenth consecutive month in February, with the rate of job creation the strongest in over three years. Service providers reported a particularly steep rise in workforce numbers, while employment growth at manufacturers was only marginal. Anecdotal evidence largely linked higher headcounts to increased new business. The amount of work outstanding in Germany’s private sector rose for the first time in ten months in February, thereby signalling pressure on operating capacity in the sector. Panel members attributed higher work-in-hand to increased order intakes. Reduced oil and fuel prices resulted in the third successive monthly fall in input costs faced by German private sector companies. The rate at which costs fell eased slightly since January, but was nevertheless the second-strongest in nearly five-and-a-half years. Despite falling input costs, companies raised their prices charged for goods and services in February. The rate of charge inflation was the highest in eight months, which panellists linked to exchange rate factors and the minimum wage. German manufacturers reported a further drop in purchasing activity in February. The rate of contraction eased, however, and was only marginal overall. Meanwhile, vendor performance continued to deteriorate, with the rate at which average delivery times lengthened little-changed from January. Optimism towards the 12-month business outlook at German service providers remained positive in February. Despite dropping slightly from January’s 45-month high, the level of positive sentiment was elevated by historical standards. Companies commented on an improving economy and predicted new order growth.
