German private sector economy maintains strong growth momentum in October

The private sector economy of Germany maintained solid growth momentum at the beginning of the October quarter, showed the flash PMI survey data. The IHS Markit Flash Germany Composite Output Index came in at 56.9 in October, a bit lower than prior month’s 77-month high of 57.7. However, this is one of the highest readings seen since 2011.

Manufacturing sector, once again led the output growth. The sector’s pace of growth slowed a bit from the prior month, but continued to be solid overall and much above the long-run average. Services also showed the same trend, registering a strong rise in business activity that was just a bit slower than the one seen at the end of the third quarter.

New order growth rose for the third consecutive month in October to the most rapid pace seen since April 2011. This shows a solid upturn in services new business. Goods export orders grew sharply again, with the pace of expansion just lower than August’s recent peak.

The German private sector businesses continued to take on new staff during October to underpin a higher level of workplace activity. The rate of job creation was amongst the highest in the past six-and-a-half years. Manufacturers registered a solid rate of employment growth.

Meanwhile, October saw an additional intensification of inflationary pressure, as average prices charged for goods and services showed one of the steepest rises since mid-2011, noted Markit. Manufacturers have registered the much steeper rise in average costs, and they also faced additional noticeable deterioration in supplier delivery times in the month. The extent of the deterioration in vendor performance was the greatest seen since April 2011.

Business sentiment towards the year-ahead outlook for output continued to be solidly positive in October. The extent of optimism was a bit lower than September’s record high; however, it was still above the series’ average since July 2012, stated Markit.

At 12:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 54.2355, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 127.886. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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