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- German economy continues to underperform in August - IHS Markit
German economy continues to underperform in August - IHS Markit
According to the flash report from IHS Markit, the German economy continued to underperform in August. Growth of service sector business activity was again countered by a marked fall in goods production, while overall job creation slipped to a five-year low. Worryingly for the outlook, total new orders sank deeper into contraction territory and firms’ expectations towards future output turned negative for the first time since late 2014. Elsewhere, PMI data pointed to a further softening of inflationary pressures, driven by further falls in both manufacturing input costs and output charges.
At 51.4 in August, the Flash Germany Composite Output Index – which is based on approximately 85% of usual monthly replies – was up slightly from 50.9 in July, but still pointed to one of the weakest performances over the past six years. Robust growth of service sector business activity (Flash Services PMI down to 54.4 from 54.5 in July, to 7-month low) kept the headline index above the 50.0 no-change mark, although it was a slower (but still marked) decrease in manufacturing output that was behind the slightly improved reading. As such, August also saw the Flash Germany Manufacturing PMI tick up from 43.2 in July to 43.6.
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