German PMI disappoint in December

Dec 18, 2014

A widely-watched measure of economic activity in Germany unexpectedly slipped this month, falling to its lowest level in one and a half years despite a welcome recovery in manufacturing.

The composite purchasing managers’ index dipped from 51.7 in November to 51.4 this month - falling well short of economists expectations for a rise to 52.3, and the weakest reading since July 2013.

The manufacturing sub-index managed to climb above the 50 mark that signals the difference between contraction and expansion of activity, beating expectations to rise to 51.2 this month.

However, the services PMI disappointed, with the gauge dipping from 52.1 last month to 51.4 in December.

Germany’s economy has long been the envy of Europe, and proved remarkably resilient amid the recent crises. But the shine has faded recently, with the country flirting with a recession earlier this year despite record low unemployment.

France’s composite purchasing managers’ index (PMI) surprised positively for once this month, rising from 47.9 in November to 49.1 in December - significantly better than the 48.3 reading expected by economists.

However, the index remains below the 50 mark that indicates the difference between an expansion or contraction of activity for the ninth consecutive month – with the manufacturing PMI a particular disappointment.

The full eurozone PMIs are out at 9am in London today.

Source: THE FINANCIAL TIMES