According to a preliminary survey by S&P Global, Germany’s private sector unexpectedly returned to growth in April. The HCOB German Flash Composite Purchasing Managers’ Index (PMI) rose to 50.5 this month from 47.7 in March, surpassing a Reuters poll forecast of 48.5. This was the first reading above the 50 mark that indicates expansion in 10 months, with the composite PMI index tracking the services and manufacturing sectors that together account for more than two-thirds of the German economy.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, commented on the latest PMI numbers, stating that they estimate GDP may expand by 0.2% in the second quarter following an estimated 0.1% growth in the first quarter. The index for the service sector rose to 53.3 this month from 50.1 in March, its highest level in 10 months, suggesting that the service sector may serve as a catalyst for the overall economy.
While manufacturing remained in contraction, there was a slight decrease in confidence amongst goods producers and their rate of decline eased slightly as well as input cost inflation ticked up but remaining broadly in line with its long-run averages while output price inflation also increased but still remained below average levels according to survey data
