German manufacturing activity grows steadily in July: PMI

[BERLIN] German manufacturing activity grew steadily in July, a survey showed on Monday, suggesting this sector of Europe's largest economy had a good start to the third quarter.

Markit's Purchasing Managers' Index for manufacturing, which accounts for about a fifth of the economy, eased to 53.8 in July from 54.5 in June, remaining well above the 50 line that separates growth from contraction. It was a tick higher than the flash reading of 53.7.

Despite the slight slowdown, new orders rose for the 20th consecutive month and output posted the highest growth rate since April 2014.

Manufacturers also hired new staff for the fourth month in a row. Factories making consumer, intermediate and investment goods all added jobs.

"Today's survey results highlight ongoing steady growth in Germany's goods-producing sector at the start of the third quarter. Although the headline PMI dropped slightly since June, the underlying growth fundamentals remain strong," said Markit economist Oliver Kolodseike.

The survey pointed to the first rise in input costs in a year, although the rate of inflation was only marginal overall.

Mr Kolodseike said: "The ECB (European Central Bank) will be pleased to see that input costs rose for the first time in a year during July and selling prices stabilised, thereby adding to hopes that CPI (consumer price inflation) will edge up in coming months."

REUTERS