News

Germany July flash manufacturing PMI 65.6 vs 64.2 expected

Latest data released by Markit/BME – 23 July 2021

  • Prior 65.1
  • Services PMI 62.2 vs 59.1 expected
  • Prior 57.5
  • Composite PMI 62.5 vs 60.8 expected
  • Prior 60.1

After slight misses in the French readings earlier, German business activity improved further in July with both manufacturing and services sector seen picking up on the month.

The composite reading is the highest on record with the jump in the services sector reflecting the strongest expansion on record as well. The details reveal growing demand and capacity pressures with broad-based increase in new export business.

For now at least, the rapid rise in price pressures aren’t negatively impacting economic conditions just yet. Markit notes that:

“Germany’s private sector economy remains in the
fast lane to recovery, according to July’s flash PMI
survey. Buoyed by a resurgent service sector, the
survey’s headline index is now at a record high and
signals that the recovery still possesses strong
momentum at the start of the third quarter.

“Across the manufacturing sector, the picture on the
demand side remains highly positive, but July’s
survey suggests that output has fallen further
behind new orders as supply shortages continue to
constrain production growth. These supply-demand
imbalances across the goods-producing sector are
further underscored by a near-record increase in
backlogs of work as well as unprecedented price
increases.

“Businesses are less confident in regards to growth
prospects over the coming year, which in some
ways is to be expected as activity in the economy
gets closer to pre-pandemic levels, but it also hints
at concerns towards supply-side disruption and
doubts about how quickly the remaining restrictions
can be lifted. Still, in the context of series history,
expectations for now remain highly positive, and
this optimism continues to help drive a strong
rebound in employment levels.”

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