Germany September flash manufacturing PMI 56.6 vs 52.5 expected

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Latest data released by Markit/BME – 23 September 2020

  • Prior 52.2
  • Services PMI 49.1 vs 53.0 expected
  • Prior 52.5
  • Composite PMI 53.7 vs 54.0 expected
  • Prior 54.4

The report here offers a bit of a mixed bag, as German manufacturers are seen benefiting from some return in foreign demand but the recovery in services is losing steam as virus fears start to return and weigh on domestic consumption.

I guess the bright spot is that the German economy relies more heavily on the manufacturing side but if the virus situation does worsen and prompts tighter restrictions, that in itself will also weigh on production and output in the bigger picture.

“While latest PMI data shows German economic
output continuing to rise in September, it highlights
a growing divergence in trends between
manufacturing and services
.

“With services business activity falling for the first
time in three months
, the recovery in the tertiary
sector has possibly reached a ceiling
thanks to
ongoing social restrictions and still-high levels of
uncertainty in the economy, including around job
security. In contrast, manufacturing is still
rebounding strongly thanks to in part to improving
export demand
, with sharply rising levels of output
and new orders helping to slow the rate of job
losses in the sector.

“Rising numbers of coronavirus cases have
coincided with a drop in confidence among service
providers, while manufacturers appear to be
shaking off any worries about the potential for
further restrictions domestically or abroad, with
confidence among goods producers improving to
the highest for more than two-and-half years.”

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