Germany: Flash PMI Shows German Economy Strong in March

24 March, 2021

By David Barwick – FRANKFURT (Econostream) – German purchasing managers reported strong business activity in March, according to PMI data released Wednesday by information provider IHS Markit.

The flash PMI composite output index rose 5.7 points to a 37-month high of 56.8. The services PMI activity index was up 5.1 points to a seven-month high of 50.8, while German manufacturing output registered 68.5, a 6.8-point gain on the month and the highest result since records begain in April 1996, HIS Markit said.

According to the company, the survey was conducted in the period 12-23 March and thus largely before German pandemic containment measures were extended.

The survey results are ‘hinting at the prospect of a better-than-expected economic performance in the first quarter’, IHS Markit Associate Director Phil Smith said in a press release.

Growth in global demand for German goods was ‘showing no signs of abating’, with ‘businesses reporting that previously-delayed investments are now being realised’, he said. ‘On the flip side, however, supply chains are coming under increased pressure from the upturn in the manufacturing sector, which is pushing up factory input costs at one of the quickest rates in nearly 25 years of data collection.’

Price pressures were also becoming more evident in services, he said, driven in part by faster employment growth.

‘Businesses remain highly optimistic about the outlook over the coming year, with many pinning their hopes on progress in the vaccine rollout’, Smith said. ‘However, with the “emergency brake” restrictions coming into effect in April to stem a third wave of infections, the immediate outlook looks less promising.’