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Germany's private sector growth marks 20M low in May

Germany's private sector growth marks 20M low in May

Mubasher: Germany's business activity registered the weakest growth in May, touching the slowest pace for over one-and-a-half years, according to the latest business data on Wednesday.

The country’s flash composite output index recorded 53.1 in May, down from 54.6 in the month before, extending a fall in the past four months from a near seven-year high seen in the start of the year, IHS Markit's data showed.

The latest slowdown reflected weaker rates of growth in both service sector business activity and manufacturing output while both rose at the lowest level since late 2016.

The services purchasing managers’ index (PMI) and the manufacturing PMI both registered declines in May.

The services PMI fell to 52.1 in May from 53, marking the lowest level seen since 20 months, IHS Markit data revealed. The IHS Markit Flash Germany Manufacturing PMI was seen at 56.8 in the fifth month of the year, compared to 58.1 in April, the lowest estimated figure since February 2017.

In terms of new business received by the German private sector firms, the overall inflows rose at the slowest rate seen since almost three years, with the manufacturing sector remaining solid despite “the rate of increase also easing further from the highs in 2017 as new export sales growth continued to soften.”

The level of employment in German private sector has seen a solid increase, although the rate of job creation stood at a 17-month low, owing to slower hiring among service providers.

IHS Markit indicated that overall business confidence in Germany had dipped to its lowest level since November 2016, whereas firms’ optimism was at an 18-month low in May.

By 8:06 am GMT, the EUR/USD pair plunged 0.65% to $1.1702.