Germany January flash manufacturing PMI 47.0 vs 47.9 expected

• Prior 47.1
• Services PMI 50.4 vs 49.6 expected
• Prior 49.2
• Composite PMI 49.7 vs 49.6 expected
• Prior 49.0

Similar to the French report earlier, this is a mixed bag with manufacturing activity still in contraction territory while services activity actually improving to a 7-month high. This at least pushes the composite reading closer to stagnation with just a marginal contraction recorded to start the new year. S&P Global notes that:

“January’s flash PMI, which at 49.7 showed business activity in Germany on a more stable footing at the start of the year and was broadly in line with market consensus, lends support to the notion that a recession in the eurozone’s largest economy is by no means a foregone conclusion. There was even a return to growth in services activity after six straight months of decline, although the increase was only marginal and achieved on somewhat shaky foundations as inflows new business remained in decline.

“Alongside easing supply-chain strains, January’s preliminary survey also pointed to a continued slowdown in rates of inflation. However, whilst we’re seeing underlying cost pressures ease quite rapidly in manufacturing, it’s a different story in services where inflation remains far stickier thanks in large part to the influence of growing wage demands. The rate of increase in average prices charged for goods and services cooled only slightly and remained historically elevated in January, to suggest that core inflation is likely to continue running hot in the near term at least. Signs of continued labour market resilience will only serve to reinforce the stubbornness of inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term.

“Business confidence continues to recover from last October’s low point, but it nevertheless remains subdued compared to the situation prior to Russia’s invasion of Ukraine, particularly in manufacturing where we’re still seeing notable weakness in new orders and perhaps the beginning of a period of stock depletion as supply-chain concerns fade. Optimism has returned amid easing recession risks, but firms remain cautious about the outlook.”