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German private sector growth hits 3M-peak in May

German private sector growth hits 3M-peak in May

Mubasher: Business activity in the German private sector maintained its moderate pace in May, according to data released on Thursday.

Germany’s flash composite output index came in at 52.4 in May, up from 52.2 in April, IHS Markit's purchasing managers’ index (PMI) data showed.

This indicated “that the economy is course to see sustained expansion in Q2 following the rebound of [gross domestic product] in the opening three months of the year,” IHS Markit economist Phil Smith said.  

However, other indicators weakened, as new order inflows continued to fall for the fourth time in five months, while employment grew at the slowest pace since more than three years.

Once again, the moderate upturn in German business activity was led by a solid performance among service providers, despite the growth was one of the slowest in four month.

The services PMI was 55 during May, compared with 55.7, IHS Markit data showed.

“May data for the service sector were slightly less punchy than in recent months, with business activity, new orders and employment all rising more slowly,” Smith noted.

Although the production of goods waned at a slower momentum, the headline IHS Markit Flash Germany Manufacturing PMI was observed at 44.3, a slight decline from 44.4 in April.

This was a result of negative influences from the hiring, stocks of purchases and supplier delivery times.

“Thankfully, the manufacturing indicators for output, orders book and export sales have all picked up further from their low points in the first quarter, albeit remaining among the weakest since 2012,” the economist commented.

By 8:01 am GMT, the EUR/USD pair went down by 0.13% to $1.1135.