German factory output at six-year high

Posted on 16 Jun 2017 and read 439 times
German factory output at six-year highOutput from German factories in May grew at the strongest pace in more than six years, suggesting that manufacturing will boost overall growth in Europe’s biggest economy in the second quarter.

Markit’s (www.markit.com) Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of the German economy, jumped to 59.5 from 58.2 in April — the highest level since April 2011 and the 30th consecutive month with the index well above the 50 mark that separates growth from contraction.

Moreover, output, new orders and employment all improved at the fastest rates in around six years, with growth in new export business reaching its highest level in seven years.

Manufacturers taking part in the survey pointed to strong demand from Asian customers, adding that domestic demand for industrial goods also remained solid.

IHS Markit economist Trevor Balchin said he expected German industrial output to rise by 2.9% in 2017 as a whole, up from 1.0% growth in the previous month.

The survey also showed easing price pressures, as input price inflation slowed for the first time since July 2016; output price inflation eased for the third consecutive month.

The German economy grew by 1.9% in 2016, the strongest rate in 50 years, helped by soaring private consumption, higher state spending and increased construction.

In the first three months of 2017, the economy picked up further speed, as exports helped to drive growth, pushing up Germany’s quarterly growth rate to 0.6% (from 0.4% in the fourth quarter of 2016).

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