Solid growth in German private sector points to strong fourth quarter: PMI
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A man walks past driver cabins in the truck production plant of German truck and bus maker MAN AG in Munich, Germany, July 30, 2015. REUTERS/Michaela Rehle/File Photo
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BERLIN (Reuters) - Germany's private sector grew steadily in November, helped by stronger-than-expected activity at services companies, a survey showed on Wednesday, pointing to a solid performance in Europe's biggest economy in the final quarter of the year.
Markit's flash composite Purchasing Managers' Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, edged down to 54.9 from
October's 10-month high of 55.1.
This was a tick lower than the consensus forecast in a Reuters poll of 55.0 but still comfortably above the 50 mark that separates growth from contraction.
The data suggested that the economy will expand 0.5 percent in the final three months of 2016, lifting overall growth in the euro zone and more than doubling from the relatively weak 0.2
percent expansion in the third quarter, IHS Markit economist Rob Dobson said.
The survey indexes showed business activity in the service sector accelerated more strongly than expected in November, hitting a six-month high of 55.0, while growth in manufacturing slowed to 54.4 from a 33-month high of 55.0 in October.
Purchasing managers attributed the overall expansion mainly to higher order intakes, improved capacity and solid demand from clients abroad.
Increased costs for staff and some raw materials pushed up overall input costs, with the rate of input price inflation reaching its highest level in more than four-and-a-half years.
IHS Markit economist Oliver Kolodseike said the survey results showed that the economy was in good shape and that the robust labor market continued to be one of the main growth
drivers in Europe's largest economy.
"There are clear signs that price pressures are intensifying further... which should be welcome news for ECB policymakers who are desperately trying to boost inflation in the region,"
The government expects private consumption and state spending to drive an overall economic expansion of 1.8 percent this year, which would be the strongest rate in five years.
For 2017, Berlin predicts a slowdown in growth to 1.4 percent due to weaker foreign trade and fewer working days.
- Detailed PMI data are only available under license from Markit and customers need to apply to Markit for a license.
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((Reporting by Michael Nienaber; Editing by Hugh Lawson))
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