It Looks Like Germany Is Creeping Back

Angela MerkelREUTERS/Fabrizio BenschGerman Chancellor and leader of the Christian Democratic Union ( CDU) Angela Merkel gestures before a CDU party board meeting in Berlin September 23, 2013, the day after the German general election. German Chancellor Angela Merkel faces the daunting prospect of persuading her centre-left rivals to keep her in power after her conservatives notched up their best election result in more than two decades but fell short of an absolute majority.

Germany’s manufacturing PMI rose to 51.4 in October from a 15-month low of 49.9 in September.

Economists expected a reading of 51.8.

Markit’s Purchasing Managers’ Index is a commonly used survey to measure overall business conditions before official stats come out.

Any figure above 50 indicates the sector is growing.

Here are the key points from Markit:

  • Production growth accelerates despite marginal decline in new orders
  • Rate of job creation hits 33-month high
  • Input costs decline at sharpest rate since April

Markit economist Oliver Kolodseike said:

“The headline PMI moved back above the crucial 50.0 mark in October as output growth accelerated and

companies increased their workforce numbers to the greatest extent in nearly three years, adding to hopes that economic growth can be sustained in the coming months.

“However, the survey results also showed that new business fell for the second month running as the

Russian sanctions and a general economic slowdown weighed on demand. Worryingly, the drop in new work was driven by weakening domestic demand.

“Overall, the data send mixed signals about the health of Germany’s manufacturing sector and it is too early to say whether the sector will be able to sustain growth in the fourth quarter.”

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