Markit/BME Purchasing Managers' Index, January 2014
Germany’s manufacturing firms reported a robust improvement in operating conditions at the start of 2014, with the seasonally adjusted Markit/BME Germany Manufacturing Purchasing Managers’ Index (PMI) – a single-figure snapshot of the performance of the manufacturing economy – rising from December’s 54.3 to a 32-month high of 56.5. The PMI was boosted by accelerated output and new order growth and a second successive month of job creation. January saw a solid increase in production levels at German goods producers, with the pace of expansion the quickest in nearly three years. Panellists largely attributed production growth to the introduction of new product lines and increased new business.
Indeed, new order intakes rose at the sharpest rate since April 2011, supported by strengthening demand from foreign markets.
In line with the trends for output and total new orders, new business from abroad rose at an accelerated pace during January, with companies mentioning Asian markets and the US as sources of growth in new export business. The rise was especially sharp at companies in the consumer goods sector.
Meanwhile, capacity pressures continued to build during January, with backlogs of work rising for the fourth straight month and at the fastest pace in 33 months. All three monitored groups saw an increase in unfinished work.
Pressures on operating capacity spurred job creation in January, resulting in a second consecutive increase in workforce numbers. Companies hired additional workers to the greatest extent in two years.
Higher demand also led to a reduction of stocks of finished goods and deteriorating vendor performance. While the drop in post-production inventories slowed since December, suppliers’ delivery times lengthened at the fastest pace in just over two-and-a-half years.
With output and new orders rising sharply, companies increased their input buying to the largest extent in almost three years in January. Concurrently, stocks of purchases fell further although only slightly.
On the price front, input costs rose further in January, although at a weaker rate than seen in December and only slightly overall. Companies commented on higher prices for some raw materials. In response to increased input costs, companies raised their selling prices. Charges increased for a fourth successive month.