German flash manufacturing PMI index rebounds in July

The IHS Markit Flash Germany Manufacturing PMI rebounded in the month of July to a three-month high of 57.3 from June’s 55.9. The rise in the index showed stronger rises in output, new orders and stocks of purchases, as well as a greater incidence of supply chain delays. Manufacturing employment was up at a rate slightly changed from June, staying historically solid.

Total inflows of new business was up at the most rapid pace for four months in July. Behind this acceleration was stronger demand in the goods producing sector, where growth rebounded from June’s 27-month low. Looking at the detail, the manufacturing survey indicated that new export orders rose at the most rapid rate in three months. In the meantime, new business in the service sector rose at a pace slightly changed from June’s five-month high, and stayed solid in the context of historic data. Furthermore, employment growth continued to be sharp throughout both manufacturing services.

In spite of the sharper rate of growth in output in July, business sentiment towards the year-ahead outlook for activity continued to be comparatively subdued. The Future Output Index was at its second-lowest level in 20 months, remaining well below the highs seen in 2017. Data indicated conflicting trends at the sector level, with improved confidence among manufacturers contrasting with a waning of service providers’ sentiment to the lowest since December 2016.

Price pressures deepened in July. Input price inflation quickened for the third straight month to the highest since January, widely attributed to increased wages and fuel. Moreover, manufacturers underlined increased steel prices, as well as supply shortages emanating from China that increased prices in general.

Average output prices rose at the most rapid pace in five months in July. Charges rose at similarly marked rates in the manufacturing and services sector. Markedly, service providers increased their charges at the second-most-rapid rate ever recorded, just short of the all-time high seen in September 2000.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at -37.1009, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -162.26. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex