- Composite PMI 54.3 vs 54.5 prelim
The headline reading is an 8-month high as German services business activity continues to recover strongly in spite of record price rises across the sector. Of note, the extent to which average output prices increased was unprecedented in the survey's history so that isn't going to help on the inflation front surely. S&P Global notes that:
“The service sector is providing a much-needed boost to the German economy at a time when manufacturing is starting falter under pressure from renewed supply chain disruption and cooling demand for goods.
"The service sector has carried strong momentum into the second quarter of the year as we continue to see a boost in demand for services that were previously subject to pandemic-related restrictions. The current pace of growth looks unsustainable, however, especially when factoring in a potential drag from manufacturing and a squeeze on real incomes from ever-rising prices. Indeed, service providers' growth expectations for the year ahead are generally subdued, with the exception of consumer and transport services.
"While services is generally less exposed to the external headwinds currently impacting manufacturing, inflationary pressures are seeping through, with rates of increase in both input costs and output prices having soared to levels that far exceed anything we've seen in the history of the survey."