Germany Stuck in Period of ‘Unspectacular’ Growth, Markit Says

Germany’s manufacturing and services sectors cooled slightly in April, leaving the economy in a phase of “unspectacular” growth, according to Markit.

Its composite Purchasing Managers Index slipped to a nine-month low of 53.8 from 54 in March, it said in London on Friday. Measures for both industries declined, through remained above the 50 level that signals expansion. The report also showed that input costs fell at a less sharp pace, and output prices rose.

The Bundesbank has said that momentum in Europe’s largest economy could slow this quarter, citing weak manufacturing orders and declining business confidence. The economy grew just

0.3 percent in the first three months of the year.

“The German private sector economy is continuing its unspectacular expansionary trend,” said Oliver Kolodseike, an economist at Markit. Although the numbers are “uninspiring,” the index is “still indicative of modest growth,” he said.

Kolodseike also pointed to signs that deflationary pressures are “beginning to bottom out,” which should encourage European Central Bank policy makers.

ECB President Mario Draghi said in Frankfurt on Thursday that the bank’s policies are “effective” and need more time. The ECB, which unleashed a new round of stimulus in March, kept interest rates unchanged at record lows this week and maintained monthly asset purchases at 80 billion euros ($90 billion).

In France, Markit’s composite Purchasing Managers Index rose in April, though the factory gauge fell to an eight-month low of 48.3.

The composite PMI for the 19-nation euro area probably increased to 53.3 this month from 53.1, according to the median forecast for economists in a Bloomberg survey. Markit will publish that report at 9 a.m. London time.

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