Germany May flash manufacturing PMI 54.7 vs 54.0 expected

• Prior 54.6
• Services PMI 56.3 vs 57.2 expected
• Prior 57.6
• Composite PMI 54.6 vs 54.0 expected
• Prior 54.3

The German services sector continues to show much resilience, bolstering economic activity even if manufacturing conditions did see a slight improvement on the month. That said, there were signs of demand starting to come under pressure from market uncertainty, rising prices and supply issues, with manufacturers reporting the steepest drop in new orders for almost two years.

Meanwhile, inflation pressures remained elevated, although rates of both input cost and output price inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term ticked down slightly from April’s record highs. S&P Global notes that:

“A post-lockdown recovery in services activity continues to provide a strong tailwind for the German economy, with May’s ‘flash’ PMI data signalling that output levels remain in growth territory.

“Even manufacturing saw a slightly better performance in terms of production levels in May. However, goods producers are increasingly turning to backlogs of work to support output as new orders show a sustained decline, boding ill for growth prospects in the sector if demand for goods continues to falter.

“Business confidence towards the outlook remains subdued, with heightened uncertainty, sharply rising prices and supply chain disruption all starting to impact demand and representing risks to the outlook in the goods-producing sector in particular.

“Although the survey’s gauges of business costs and output prices ticked down from April’s record highs, they remained historically elevated and pointed to acute inflationary pressures across the economy, with the high cost of transportation, energy and commodities in general continuing to work their way through supply chains.”