- Final Services PMI 49.0 vs. 48.8 preliminary
- Prior 50.9
- Final Composite PMI 50.1 vs. 49.7 preliminary
- Prior 51.3
Key findings:
- Germany Services PMI Business Activity Index at 14-month low.
- Germany Composite PMI Output Index at 4-month low.
- Optimism towards year-ahead outlook wanes.
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“The German service sector has hit the brakes. Business activity dipped a bit in April, ending a four-month streak of growth.
The composite PMI didn’t slip into recession territory, thanks to manufacturing companies ramping up production, just like
they did in March after a slump that lasted nearly two years.
“Service providers probably felt the squeeze on profit margins in April. Costs went up more than last month, but they had to
dial back on price hikes. With this in mind, confidence about future business took a hit, with the index dropping further below
its long-term average.
“At first glance, the future doesn’t look too bright. New business has shrunk for the eighth month in a row, order book
backlogs have been sliding downhill for most of the past two years, and there’s no sign of a solid recovery in exports. But,
companies are still hiring, and job growth has even picked up for the second month straight. Clearly, businesses aren’t ready
to throw in the towel just yet. And for good reason, as the new government, expected to start this week, could well give the
economy a boost with its fiscal stimulus program in infrastructure and defence, plus more social spending. All of this should
also spread to the services sector.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.