According to a preliminary survey released on Tuesday, Germany’s private sector surprised analysts by rebounding in April, buoyed by a significant uptick in activity within the country’s service sector,
The HCOB German Flash Composite Purchasing Managers’ Index (PMI), compiled by S&P Global, climbed to 50.5 this month from 47.7 in March, surpassing a Reuters poll forecast of 48.5. This marks the first reading above the 50 mark, indicating expansion, in 10 months.
“Factoring in the PMI numbers into our GDP Nowcast, we estimate that GDP may expand by 0.2% in the second quarter, following an estimated 0.1% growth in the first quarter,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The index for the service sector surged to 53.3 this month from 50.1 in March, marking its highest level in 10 months and surpassing a forecast of 50.5.
“The service sector may serve as a catalyst for the economy,” de la Rubia noted.
Despite the ongoing contraction in manufacturing, the rate of decline in factory production moderated, and confidence among goods producers reached its highest level in a year, the survey revealed.
The manufacturing PMI index increased to 42.2 from 41.9 in the previous month, albeit below the forecast of 42.8.
The survey also indicated a slight uptick in price pressures at the beginning of the second quarter. Both input cost and output price inflation rates edged up, though they remained broadly in line with their respective long-run averages.
