German PMI rises to its highest level since 2011

Germany’s private sector grew to its highest level in 73 months in May, suggesting the continuing momentum in the European largest economy.

IHS Markit composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services that account for more than two-thirds of the economy, rose for the fourth time in six months, to 57.4 from 56.7 in April.

It was the highest reading since April 2011, well above the no-change mark of 50.0 and beating market’s forecasts.

Trevor Balchin, senior economist at IHS Markit said: “German economic growth strengthened in May to the fastest in just over six years, according to the final composite PMI data. The acceleration was driven by the manufacturing sector, where output growth continued to outpace services expansion. Notably, manufacturing new export orders rose at the fastest rate in seven years, suggesting that net exports will continue to boost GDP growth in the second quarter,” he said.

The seasonally adjusted IHS Markit Germany Services PMI Business Activity Index in May remained unchanged from April at 55.4, close to March’s 15-month high of 55.6, signaling a sustained strong expansion in service sector output.

The headline figure also remained above its long-run average of 53.2 since the survey began in June 1997. Activity has risen continuously for four years, the second-longest sequence of growth in the survey history.