Latest data released by Markit/BME - 1 March 2021

The preliminary report can be found here. Little change and this reaffirms more solid conditions in German manufacturing, with the headline keeping at a three-year high.

New orders were a notable contributor, rising at their fastest pace since last October but the reading is also partially skewed by increased lead times, with over 64% of surveyed firms reportedly facing delays.

That in turn also pushed cost inflation higher with the rate climbing at its quickest pace since April 2011. Markit notes that:

"German manufacturing saw strong growth in February on the back of an increasingly positive trend in export orders. Capital goods producers noted a particularly strong performance, in a sign of increasing investment spending.

"But while the headline numbers are very encouraging and there was finally stability in employment at factories, less positive was the news that supply chain pressures intensified in February, with more firms reporting delays than ever before in nearly 25 years of data collection.

"There looks to be further upward pressure on inflation in the German economy from supply bottlenecks and a subsequent surge in manufacturing input costs. Not only did costs rise more quickly in February, but goods producers were also better able to pass the burden on, leading to the steepest rise in factory gate prices for nearly two-and-a-half years.

"The data suggest that supply disruption is making it more difficult to replenish stocks, which could have consequences for production in the coming months. Nevertheless, the overriding sentiment for the longer-term outlook is optimism, with a record number of manufacturers expecting to see output rise over the next 12 months."