Consensus | Consensus Range | Actual | Previous | |
---|---|---|---|---|
Composite Index | 51.2 | 51.1 to 51.5 | 50.9 | 51.0 |
Manufacturing Index | 47.0 | 47.0 to 48.0 | 48.3 | 46.1 |
Services Index | 51.5 | 51.0 to 52.0 | 50.2 | 52.2 |
Highlights
While the services sector also saw growth, at 50.2 it is 1.3 points less than the consensus and 0.9 points less than February's final. This suggests its growth pace slowed slightly. At the same time, manufacturing showed signs of recovery, with its PMI climbing to 48.3, 1.3 points above the consensus and the highest in 31 months. Factory demand conditions recovered, with new orders rising for the first time since March 2022 but export businesses remained slightly contracted as seen in February. Conversely services saw the steepest decline in new orders in a year. This is likely due to lack of certainty and client confidence.
Labour market trends divergedservices firms expanded their workforce again, but manufacturing job cuts deepened, leading to a modest employment decline. Meanwhile, input cost inflation eased, particularly in the service sector where input costs and prices charges increased the slowest in five months.
Due to these improvements, business confidence rose, with growth expectations rising in both sectors particularly in manufacturing. While manufacturing's downturn is softening, and services remain resilient, the economic recovery remains fragile, dependent on sustained demand and price stability in the coming months. The latest update leaves the German RPI at minus 17 and the RPI-P at minus 14, meaning that economic activity in general is falling short of market expectations.