Germany September flash manufacturing PMI 56.6 vs 52.5 expected

Author: Justin Low | Category: News

Latest data released by Markit/BME - 23 September 2020

  • Prior 52.2
  • Services PMI 49.1 vs 53.0 expected
  • Prior 52.5
  • Composite PMI 53.7 vs 54.0 expected
  • Prior 54.4
The report here offers a bit of a mixed bag, as German manufacturers are seen benefiting from some return in foreign demand but the recovery in services is losing steam as virus fears start to return and weigh on domestic consumption.

I guess the bright spot is that the German economy relies more heavily on the manufacturing side but if the virus situation does worsen and prompts tighter restrictions, that in itself will also weigh on production and output in the bigger picture.

"While latest PMI data shows German economic output continuing to rise in September, it highlights a growing divergence in trends between manufacturing and services.

"With services business activity falling for the first time in three months, the recovery in the tertiary sector has possibly reached a ceiling thanks to ongoing social restrictions and still-high levels of uncertainty in the economy, including around job security. In contrast, manufacturing is still rebounding strongly thanks to in part to improving export demand, with sharply rising levels of output and new orders helping to slow the rate of job losses in the sector.

"Rising numbers of coronavirus cases have coincided with a drop in confidence among service providers, while manufacturers appear to be shaking off any worries about the potential for further restrictions domestically or abroad, with confidence among goods producers improving to the highest for more than two-and-half years."

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