Reuters-German manufacturing
growth reached its highest in almost three years in December, driven by rising
demand from Asia and the United States, a survey showed on Monday,
suggesting
the sector will contribute to an expansion in the fourth quarter.
Markit's Purchasing
Managers' Index (PMI) for manufacturing, which accounts for about a fifth of
the economy, rose to 55.6 from 54.3 in November to reach its highest level in
35 months.
That was slightly
above a flash reading and well above the 50 line that separates growth from
contraction.
"Strong growth
in December meant that goods producers enjoyed their best quarter in nearly
three years during Q4," Markit economist Philip Leake said. "The
manufacturing sector is therefore likely to help overall GDP growth accelerate
from the modest 0.2 percent pace seen in the third quarter."
He added that
companies reported solid improvement in domestic demand as well as new business
wins in Asia, Europe and the United States.
"There were
also encouraging signs for further growth in 2017. Companies look set to hire
in an effort to raise operating capacity, following the sharpest increase in
backlogs of work since early-2014," Leake said.
Expansions of output
and new orders underpinned the overall improvement in conditions, Market said,
noting that new business increased for the 25th consecutive month with the rate
of growth just below the record over that period.
Responding to the
rising demand, manufacturers raised their output at a quicker pace. The rise in
production was the highest since July, it said.
Inflationary
pressures also increased in December. Input costs rose at the fastest pace
since June 2011. The weaker euro helped to drive up import costs, Markit said.
The survey was
another positive sign after Ifo's closely watched business climate index showed
last month that morale among executives rose in December to its highest level
since February 2014.
The economy grew 0.7
percent in the first quarter and 0.4 in the second. For the year, economic
institutes predict a growth rate of 1.9 percent, mainly driven by soaring
private consumption and higher state spending on migrants.
Detailed PMI data
are only available under license from Markit and customers need to apply to
Markit for a license.
To subscribe to the
full data, click on the link below: www.markit.com/Contact-Us
Reuters
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