Germany PMI Manufacturing dropped from 56.9 to 54.1 in April, below expectation of 54.4. That’s also the lowest in 20 months. PMI Services rose from 56.1 to 57.9, above expectation of 55.5. That’s a 3-month high. PMI Composite dropped from 55.1 to 54.5 a 3-month low.
Phil Smith, Economics Associate Director at S&P Global said:
“We’re seeing a growing divergence in the performance of Germany’s manufacturing and service sectors. Whilst services activity continues to build momentum thanks to the easing of COVID restrictions and the subsequent release of pent-up demand, manufacturing production has fallen into contraction amid a combination of renewed supply disruption and cooling demand for goods.
“For now, the recovery in the service sector is providing a key support to overall economic activity, but the reopening of the economy will provide only a temporary boost to growth and spillovers from a protracted downturn in manufacturing cannot be ruled out. Confidence towards the outlook has fallen across the board and especially sharply in the manufacturing sector since the start of the year, with businesses voicing their concerns about soaring prices, material shortages and a more cautious attitude among customers.
“One theme that we’re seeing throughout the economy is rising prices. Latest data showed record increases in both goods and services output prices in April, reflecting widespread attempts by businesses to offset the increasing cost of energy, materials and labour. The broad-based nature of the price increases points to inflation remaining historically elevated in the near-term at least.”
