Markit/BME Purchasing Managers’ Index, December 2011
December data pointed to a slower and only modest decrease in German manufacturing output. This was despite a relatively sharp fall in new orders, which led to further backlog clearance and efforts by firms to lower their inventories. Jobs growth meanwhile eased again in December and was the weakest for just over a year-and-a-half.
At 48.4, up slightly from 47.9 in November, 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 – highlighted another deterioration in business conditions during December. The headline index climbed for the first time since April, but nonetheless remained below the no-change mark of 50.0 for the third month running.
New business and output continued to fall during December, albeit at slower rates than one month previously. Although the contraction in production was only marginal, new business dropped at the second-fastest pace since June 2009. This in part reflected a marked contraction in new business from abroad, with firms highlighting emerging signs of weakness in Asia as well as ongoing subdued demand across Europe.
With new order inflows down further in December, German manufacturers reduced their backlogs of work for a fourth successive month. The fall in outstanding business was steep, albeit slightly weaker than in November.
German manufacturers continued to hire additional staff at a solid pace in December, which they generally linked to long-term expansion plans. That said, the overall rate of job creation was the weakest since May 2010.
December saw stocks of finished goods at German goods producers fall for the first time in five months, as firms looked to align inventories with lower new order inflows. Stocks of purchases also fell on the month, and at the fastest pace since February 2010. This primarily reflected a sixth successive monthly fall in input buying.
Despite a further reduction in purchasing activity in December, suppliers’ delivery times on average remained unchanged from one month previously. Lower demand for inputs nonetheless contributed to a further decrease in input prices, extending the current sequence of decline to three months. In particular, panellists highlighted falling prices for metals such as steel.
German manufacturers’ factory gate prices rose again in December. Charge inflation was the strongest for three months, although competitive pressures meant that, on average, output prices increased only modestly on the month.
Quelle: Markit/BME e.V.
