Latest data released by Markit/BME - 1 February 2021

The preliminary report can be found here. The German manufacturing upturn continues in January, with little change observed in the final estimate. There are concerns about potential supply-chain bottlenecks but so far that is not showing up in the data outside of higher input cost inflation and lower inventories. Markit notes that:

"The German manufacturing sector remained in growth territory in January and is doing a lot of the heavy lifting in terms of supporting overall economic activity during the current lockdown.

"However, the survey gives some cause for concern regarding the growing incidence of supply delays. Increasing demand for inputs from manufacturers, combined with shortages of materials and shipping containers has created a perfect storm for supply chains, with January's survey indicating a record increase in lead times.

"Whilst any impact on actual production levels seems to have been only limited so far, with output keeping pace with new orders, we are seeing declining levels of inventories at manufacturers, and therefore a growing risk of disruption.

"Supply bottlenecks have led to a spike in costs, with purchasing price inflation accelerating to a two-and-ahalf year high in January. Despite these issues, however, manufacturers remain buoyed by the prospect of improved demand conditions in the year ahead, with output expectations at a record high."