Photographer: Krisztian Bocsi/Bloomberg

German Economy Shows Strength as Manufacturing Gauge Improves

Updated on
  • IHS Markit’s composite PMI eases to 54.8 in Dec. from 55
  • Index signals strong year-end for German firms, Markit says

Germany’s economy ended 2016 on a strong footing, with a key index suggesting growth accelerated in the fourth quarter.

IHS Markit said its composite Purchasing Managers Index was at 54.8 this month after a reading of 55 in November, capping the economy’s strongest three-month period since the second quarter of 2014. That indicates economic growth picked up from the 0.2 percent pace recorded in the three months through September.

While Germany’s services PMI declined to 53.8 in December, it remained well above the key 50 level that divides expansion from contraction, Markit said. A measure of manufacturing rose to 55.5, the highest almost three years.

Germany’s Economy Ministry said this week that growth will likely accelerate in the last three months of the year as global and export prospects brighten. Investor confidence held at its highest level since June, a report published Tuesday showed.

The PMI “signaled a strong end to the year for German private-sector firms,” said Markit economist Philip Leake.

In France, the composite PMI rose to 52.8 in December -- an 18-month high -- from 51.4 in November. The gauge for the euro area probably came in at 53.9 this month, unchanged from November, according to the median forecast of economists in a Bloomberg survey. Markit will publish that number at 9 a.m. London time.

— With assistance by Piotr Skolimowski

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