Markit/BME Purchasing Managers’ Index, August 2011
August data pointed to another month of both marginal output growth and falling new business volumes in the German manufacturing sector. At 50.9, down from 52.0 in July, the seasonally adjusted Markit/BME Germany Purchasing Managers’ Index (PMI) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy – was the lowest since September 2009. The index remained above the neutral 50.0 mark, but it has now declined during five of the six months since the survey-record high registered in February.
Growth of German manufacturing output eased fractionally since the previous month and was the slowest since July 2009. Higher levels of production were seen in the investment goods sector, but moderate reductions were seen across the consumer and intermediate goods sectors.
Weaker new business levels were the main reason for subdued output growth in August. Latest data pointed to a fall in intakes of new work for the second month running and the rate of contraction was the fastest since June 2009. Anecdotal evidence frequently suggested that unfavourable global economic conditions and an uncertain business outlook had dampened client demand. The downturn in sales to export markets was highlighted by a further reduction in new business from abroad in August, with the rate of contraction also the sharpest for over two years.
Softer market demand helped prevent an accumulation of backlogs of work in the manufacturing sector in August. Volumes of outstanding business were broadly unchanged since the previous month, in contrast to the robust rises seen in the first five months of the year.
Meanwhile, stocks of finished goods at manufacturing firms accumulated at the steepest pace since the survey began in April 1996, suggesting that sales were much weaker than expected in August. The rise in post-production inventories was particularly sharp in the intermediate and investment goods sectors. In contrast, stocks of purchases were broadly unchanged in August, helped by lower input buying and efforts to adjust to a less favourable outlook for production levels.
Jobs growth was relatively resilient in August, with firms attributing higher employment levels to ongoing attempts to boost operating capacity. Increased staffing numbers have been recorded for 17 consecutive months and the latest rise was in line with the average for the current period of expansion.
Input price inflation remained much slower than the survey-record highs seen at the start of the year. The latest increase in average cost burdens was the slowest since December 2009. Weaker cost inflation was helped by softer global demand for raw materials and reports of reduced strain on supply chains. August data also pointed to a moderation in output price inflation to its weakest for a year. This was linked to slower cost rises and constrained pricing power following the recent falls in new order levels across the sector.
Quelle: Markit/BME
