Germany’s private sector grew at its slowest pace in nearly six years, led by a sharp decline in manufacturing, flash data from IHS Markit revealed on Friday.
The composite output index fell to a 69-month low of 51.5 in March from 52.8 in February. Economists had forecast a rise of 52.7.
Any reading above 50 indicates an expansion in the sector.
The flash services Purchasing Managers’ Index dropped to 54.9 in March from 55.3 in February. Economists had expected the index to ease to 54.8.
The flash manufacturing PMI dropped more-than-expected to 44.7 in March from 47.6 In February. The reading was the lowest in six-and-a-half years. Economists had forecast the reading to rise 48.0.
Manufacturing output PMI also fell to a 79-month low of 45.0 in March to 47.9 in February.
A slump in new export orders led the sharp contraction in manufacturing order books. Export demand fell at the quickest pace since August 2012.
Delayed decision-making among clients due to uncertainty, as well as weaker demand in the automotive sector contributed to the fall in demand.
“The first decrease in factory employment for three years is perhaps a warning sign for the health of domestic demand, with overall job creation now running at its lowest since May 2016”, Phil Smith, Principal Economist at IHS Markit, said.
Degree of optimism among service providers eased since February, while manufacturing sentiment sunk further into negative territory to the weakest since late-2012, the survey found.
The material has been provided by InstaForex Company – www.instaforex.com