Germany February flash manufacturing PMI 46.5 vs 48.0 expected | Forexlive

• Prior 47.3
• Services PMI 51.3 vs 51.0 expected
• Prior 50.7
• Composite PMI 51.1 vs 50.4 expected
• Prior 49.9

Much like the French reading, it’s a contrast of a report with manufacturing activity slowing while services is picking up. That said, on the balance of things, the German economy is seen moving back into growth territory and that is a positive at least. That will keep ECB rate hike prospects well on the table. S&P Global notes that:

“February’s flash PMI survey showed the German private
sector economy return to growth territory for the first time
eight months, alongside continued resilience in the labour
market and a further slight recovery in business
confidence.

“Encouragingly, the increase in business activity was
broad-based by sector. However, whereas the upturn in
services activity was at least partly demand-related,
higher manufacturing output owed almost exclusively to a
substantial easing of supply-chain bottlenecks, which
merely allowed goods producers to catch up on backlogs
of work. With manufacturing new orders still in
contraction territory, goods producers remain only
cautiously optimistic about the year-ahead outlook, and
they will likely need to see demand revive for that to
change.

“The cooling of demand in the goods-producing sector
and subsequent easing of supply-chain pressures has
seen factory input costs start to fall. Still, like their service
sector counterparts who once again highlighted
particularly strong wage demands, manufacturers
continued to raise their output prices at a robust rate
during February, signaling that core inflationary
pressures remain elevated. However, the rate of increase
in average prices charged for goods and services
continued to slow, down to its lowest since May 2021.”

/EUR