|Composite - Level||54.1||54.0||54.1|
|Services - Level||55.5||55.1||55.3|
At 54.0, the final composite output index in March was just a tick weaker than in February and also just 0.1 points short of its level at the start of the year. To this end, the fact that it hit an 8-month low is probably somewhat misleading.
The downward revision reflected a slightly softer service sector for which a flash estimate of 55.5 was trimmed to a still very respectable 55.1. Even so, growth of new business slowed to its weakest rate in five months and the rise in backlogs was the smallest in seven. Headcount continued to climb for a twenty-ninth straight month but March's gain was the least marked since last July. Business sentiment regarding the year ahead was up marginally versus mid-quarter.
Inflation developments were modestly positive. Input costs edged slightly higher during the month although this still saw the rate of inflation slip to its weakest point in more than six years. Service provider charges were also increased again although here too, the rate of inflation dipped versus the previous month.
Overall, it seems that March was a reasonably good period for the German economy. Nonetheless, manufacturing (PMI 50.7) continued to labour and the slowdown in new business growth raises a cloud over the near-term outlook for services. The risk is that second quarter GDP fails to register the acceleration that policymakers at home and abroad so want to see.
The Germany Composite PMI is based on original survey data collected from a representative panel of 1,000 companies based in the German manufacturing and service sectors. The final Germany Composite PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.
The Germany Services PMI is produced by Markit and is based on original survey data collected from a representative panel of over 500 companies based in the German service sector. The final Germany Services PMI follows on from the flash estimate which is released a week earlier and is typically based on at least 75 percent of total PMI survey responses each month.
The Purchasing Managers Index (PMI) survey has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.
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