Latest data released by Markit/BME - 23 July 2021
- Prior 65.1
- Services PMI 62.2 vs 59.1 expected
- Prior 57.5
- Composite PMI 62.5 vs 60.8 expected
- Prior 60.1
After slight misses in the French readings earlier, German business activity improved further in July with both manufacturing and services sector seen picking up on the month.
The composite reading is the highest on record with the jump in the services sector reflecting the strongest expansion on record as well. The details reveal growing demand and capacity pressures with broad-based increase in new export business.
For now at least, the rapid rise in price pressures aren't negatively impacting economic conditions just yet. Markit notes that:
"Germany's private sector economy remains in the fast lane to recovery, according to July's flash PMI survey. Buoyed by a resurgent service sector, the survey's headline index is now at a record high and signals that the recovery still possesses strong momentum at the start of the third quarter.
"Across the manufacturing sector, the picture on the demand side remains highly positive, but July's survey suggests that output has fallen further behind new orders as supply shortages continue to constrain production growth. These supply-demand imbalances across the goods-producing sector are further underscored by a near-record increase in backlogs of work as well as unprecedented price increases.
"Businesses are less confident in regards to growth prospects over the coming year, which in some ways is to be expected as activity in the economy gets closer to pre-pandemic levels, but it also hints at concerns towards supply-side disruption and doubts about how quickly the remaining restrictions can be lifted. Still, in the context of series history, expectations for now remain highly positive, and this optimism continues to help drive a strong rebound in employment levels."