Latest data released by Markit/BME - 21 May 2021
- Prior 66.2
- Services PMI 52.8 vs 52.0 expected
- Prior 49.9
- Composite PMI 56.2 vs 57.1 expected
- Prior 55.8
A bit of a mixed report as the manufacturing sector cools off a little while services start to pick up, with the services print at a 10-month high. Manufacturing output was a bit of a drag - it is still high historically - but supply disruptions are clearly weighing.
Markit notes that:
"May saw a welcome pick-up in services activity across Germany, as firms reported a rise in demand across the sector for the first time since the retightening of lockdown measures last October. The improved performance in services comes at a crucial time, making up for a further loss of momentum in manufacturing due to worsening supply issues.
"While the demand picture for manufacturing remains positive, we are getting more reports from businesses of supply shortages curbing production levels and weighing on new orders due to forced downtime at customers. On top of this, there is also the issue of an associated surge in costs, with supply shortages pushing up factory input prices in May at a rate that easily surpasses anything seen before in the manufacturing survey's 25-year history. Inflationary pressures are increasingly spreading to services as well, pushing the overall measures of input costs and output prices both to record highs.
"The survey suggests that the surge in operating expenses is having implications for staff recruitment, with some manufacturers reporting efforts to control costs despite growing demand. Nevertheless, with backlogs rising at a near-record rate as demand continues to outstrip supply, and firms still strongly confident about future activity, there remains a positive attitude towards hiring."
