German Economy Largely Unfazed by Market Volatility, Markit SaysJana Randow
German manufacturers and service providers shrugged off uncertainty stemming from turbulence in financial markets as new orders increased, Markit Economics said.
While a Purchasing Managers’ Index for both industries fell to 54.5 in January from 55.5 in December, the weakest in three months, it still signaled “robust” growth, the London-based company said on Friday. A reading above 50 indicates expansion.
“Germany’s private sector economy was largely unaffected by the recent stock-market turmoil,” said Oliver Kolodseike, an economist at Markit. “Companies should remain in expansion mode in coming months. New orders continued to rise strongly and employment was raised at a healthy rate as capacity pressures continued to build.”
Slumping oil and international financial-market turmoil sparked by weaker growth in China are threatening to weigh on the economy in Germany and the euro area. On Thursday, European Central Bank President Mario Draghi held out the prospect of more stimulus as early as March to stoke inflation.
While German input prices fell for the first time in almost a year, companies were still able to slightly raise charges, Markit said. New orders rose for a 13th month and the country’s labor market continued to strengthen, according to the statement.
A composite PMI for France climbed to 50.5 in January from
50.1, Markit said. A measure for the euro area probably fell to
54.1 from 54.3, according to a Bloomberg survey of economists. That report is due at 10 a.m. Frankfurt time.