German manufacturing PMI rises to 5-month high
Investing.com
Published Jan 24, 2012 03:40AM ET
In a report, market research group Markit said that its preliminary German manufacturing purchasing managers’ index rose by 2.5 points to a seasonally adjusted 50.9 in January from a reading of 48.4 in December.
Analysts had expected the index to rise by 0.7 points to 49.1 in January.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Meanwhile, the report showed that service sector activity in Germany rose to a seven-month high in January.
The preliminary services purchasing managers’ index rose by 2.1 points to a seasonally adjusted 54.5 from 52.4 last month. Analysts had expected the index to ease up 0.2 points to 52.6.
The index has posted above the 50.0 no-change level in each of the past two months, with the latest improvement driven by both manufacturing and service sector growth.
Service providers in Germany pointed to a solid rise in business activity that was the fastest for seven months. Manufacturers meanwhile reported a return to output growth in January, thereby ending a three-month period of contraction.
Commenting on the report, Tim Moore, Senior Economist at Markit said, “While the latest survey raises hopes that Germany’s economy will return to expansion in the first quarter, firms are still commenting on clients’ unwillingness to spend and further delays to investment decisions.”
“Whether a sustainable upturn will materialize is therefore largely dependent on the degree to which economic uncertainty eases in the months ahead,” he added.
Following the release of the data, the euro remained modestly higher against the U.S. dollar, with EUR/USD easing up 0.06% to trade at 1.3021.
Meanwhile, European stock markets held on to losses. The EURO STOXX 50 declined 0.45%, France’s CAC 40 shed 0.5%, the FTSE 100 fell 0.5%, while Germany's DAX dropped 0.6%.
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