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German factories shrug off emerging markets slowdown
[BERLIN] German factory activity rose in November to its highest level in three months, a survey showed on Tuesday, suggesting Europe's largest economy is shaking off a slowdown in emerging markets and the Volkswagen emissions scandal.
Markit's purchasing managers' index (PMI) for manufacturing, which accounts for about a fifth of Europe's largest economy, rose to 52.9 in November from 52.1 the previous month.
That was slightly above a Reuters consensus forecast and a preliminary estimate of 52.6. "For now, it seems as if Germany's goods-producing sector is largely unaffected by the VW emissions scandal," said Markit economist Oliver Kolodseike. "It is especially encouraging to see that new export business rose at the strongest rate in 21 months, despite the growth slowdowns seen in emerging markets," he added.
Some of the participants in the survey said demand from abroad had been boosted by the weak euro, which recently fell to a seven-month low against the dollar on expectations of further easing by the European Central Bank.
A survey by the Munich-based Ifo economic institute last week found German manufacturers, especially in the automotive sector and chemicals industry, were optimistic about future exports due to the weaker euro.
Output at factories expanded at its fastest pace in three months, led by consumer and investment goods producers, while employers also continued to add to their headcount.
Lower commodity and energy prices also pushed down input costs. Despite this, German manufacturers raised selling prices marginally for the first time in three months. Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.