Weaker growth in German manufacturing

Weaker growth in German manufacturing

Manufacturing purchasing managers’ index (PMI) data for Germany showed a reading of 51.4 in May, down from 52.1 in April, a three-month low.

The figures released by Markit showed further slowing of private sector output growth in Germany as well with the Markit flash Germany composite output index falling from April’s 54.1 to 52.8 in May.

While any data above 50 signals an expansion, Markit pointed out the rate of growth was the weakest in 2015 so far.

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It confirmed that both manufacturers and service providers had seen slower activity growth, which was partly attributed to relatively weak demand and rising cost pressures.

The data from Germany comes after its economy expanded at 0.3 per cent in the first quarter of 2015, not at the 0.5 per cent that had been expected, according to data published earlier this month.

Oliver Kolodseike, economist at Markit Economics, said: “May’s flash PMI results signalled a further slowing in economic growth in Germany’s private sector. Companies reported weaker expansions in both output and new orders, with some survey participants commenting on weak demand, economic uncertainties and rising cost pressures.”

He added: “While the survey data are consistent with further GDP growth heading into the middle of the year, it looks as if this rate of expansion of the German economy will remain sluggish in the months ahead.”