Output growth at German private sector companies slowed further at the beginning of the second quarter, as highlighted by the Markit Flash Germany Composite Output Index falling from March’s 54.0 to 53.8 in April. Although growth eased only marginally since the previous month, the latest expansion was the slowest since last July.
Service providers reported a slightly weaker increase in activity, while output at manufacturers rose at the strongest rate since January. In contrast to the trend for output, the amount of new business placed with private sector firms in Germany increased at a faster pace. Some panellists commented that new order intakes normalised after an underwhelming March, while others observed strong demand from foreign markets. Indeed, manufacturers recorded the strongest rise in new export orders in 2016 so far, with specific mentions of China, Southern Europe and the US as sources of growth.
Meanwhile, businesses were encouraged to further add to their payrolls in April, thereby extending the ongoing sequence of employment growth to twoand-a-half years. Some panellists hired additional workers in order to process backlogs, while others commented on increased new orders.
The rate of job creation accelerated marginally since March, but remained below levels seen throughout most of last year. As has been the case since August of last year, backlogs of work rose during the month, which panel members largely attributed to increased new order intakes. However, with rising employment levels able to alleviate some pressure on operating capacity, the latest accumulation of business outstanding was only marginal overall