Latest data released by Markit/BME - 3 March 2021

  • Composite PMI 51.1 vs 51.3 prelim

The preliminary report can be found here. A slight downwards revision to the initial readings but all this does is reaffirm that the German manufacturing sector continues to carry the weight here as the services sector stumbles amid lockdown measures.

Business activity fell for a fifth month running and at its quickest pace since last May, with new business also seen down for five months consecutively last month.

That said, businesses retain a high degree of optimism as confidence levels are sitting close to the two-year highs hit in January and comfortably above the series average.

Markit notes that:

"The impact of Germany's extended lockdown was seen in February's services PMI data, with business activity in the sector down markedly and for the fifth month in a row.

"Weakness in demand was seen across the board, with even firms operating in sectors outside of hospitality and leisure noting a wait-and-see attitude among clients and disruption from the restrictions on faceto-face contact and travel. Still, all in all we've seen a much more resilient performance during the latest lockdown than was seen last spring and, unlike then, firms are now highly optimistic about the outlook.

"Contrary to the picture for manufacturing, inflationary pressures across the service sector remained relatively muted in February, with any cost increases often being absorbed by firms due to the softness in demand.

"The survey will be able to offer early insights into how price pressures across the service sector are evolving as swathes of businesses reopen and pent-up demand is released over the coming months. The trend in employment at services firms, which in February continued to show only a slow recovery amid underutilised capacity in the sector, will also help gauge wage pressures, or the lack of."