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German private sector growth loses steam in February: PMI
[BERLIN] Growth in Germany's private sector slowed for the second month running in February, a survey showed on Monday, suggesting Europe's biggest economy is feeling the pinch from a slowdown in emerging markets.
Markit's flash composite Purchasing Managers' Index (PMI), which tracks manufacturing and services activity that accounts for more than two-thirds of the German economy, fell to 53.8 from 54.5 in January.
That reading was still well above the 50 threshold that separates growth from contraction, as it has been for 34 months now.
But activity in the manufacturing sector, one of the two the survey monitors, increased at the slowest pace since November 2014. The sub-index dropped to 50.2 from a 52.3 reading last month and fell well below a Reuters consensus forecast of 52.0.
Purchasing managers attributed the slowdown to weaker foreign demand and a near stagnation in export orders, said Markit chief economist Chris Williamson, in a sign Germany is beginning to feel the repercussions from a global economic downturn.
In the services sector, by contrast, the reading inched up to 55.1 compared to 55.0 in January. This was above a Reuters consensus forecast of 54.7.
The survey showed that job creation in the manufacturing and services sectors has dropped to its lowest level in almost a year. Staffing levels in the manufacturing sector even decreased for the first time in one-and-a-half years.
But Williamson played down the prospect of a significant slowdown in German gross domestic product in the first quarter of this year. "On our measure, Germany is currently still looking at 0.3 per cent growth in the first quarter," Williamson said. "But of course much depends on what happens in March. If there is a further downturn then, we could easily see 0.2 per cent growth and I think that's where we're heading."