German manufacturing PMI rises to all-time high

German economy grows at the fastest rate for over six-and-a-half years according to manufacturing and services activity surveys from IHS/Markit research.

German manufacturing purchasing managers index (PMI) rose to an all-time high in December standing at 63.3 while services PMI rose to 55.8, the highest level in last 24 months.

The composite PMI rose to 58.7 in December, the highest level in last 80-months.

Key comments from Phil Smith, Principal Economist at IHS/Markit:

• "December’s flash PMI survey results are the icing on the cake for what has been a strong year for the German economy. Growth has been robust throughout 2017, and the pace of expansion has kicked even higher in last two months to take it to a level not seen since early-2011."
• "The results mean that IHS Markit’s forecast for annual GDP growth of 2.6% is looking good, with a slight chance of an even higher out-turn."
• "The manufacturing sector remained the brightest spot, with the headline PMI moving into territory previously unseen in over two decades of data collection. Output, new orders, and employment all exhibited growth that was among the fastest in the survey history, though the record reading was as much attributable to an unprecedented incidence of supplier delivery delays. These, in turn, led to a boost in firms’ holdings of safety stocks of purchases – the fifth and final component of the headline PMI."
• "Firms’ confidence rebounded strongly since November when the survey had shown some anxiety among businesses in the immediate aftermath of the breakdown of coalition talks. This injection of optimism helped support further employment growth, with job creation running at close to the highest seen in the past six-and-a-half years."