Purchasing Managers’ Index Climbs to 49.2
The Markit/BME Purchasing Managers’ Index (PMI) hit a 12-month high in August, rising 3.5 points from 45.7 to 49.2, just slightly below the growth mark of 50. It was in July 2008 that the index was above 50 points for the last time.
The partial index “Manufacturing” was up by 4.1 points, at 54.3, with the manufacturers of investment goods registering the strongest growth rates. Across all industries, global players and small and medium-sized companies recorded the highest increase in new orders since March 2008. The positive economic development at home and abroad led, according to Bundesverbandes Materialwirtschaft, Einkauf und Logistik (BME), to a significant rise in new orders. Companies could retain existing customers and increasingly attract new customers.
Purchasing prices for pre-materials continued to fall. Many companies obtained discounts from their suppliers. However, rising oil prices made purchasing prices fall at a much slower pace. Vice versa, manufacturers reduced their selling prices as a consequence of on-going competitive pressures.
Job shedding continued as demand was unstable, but at a slower pace than in previous months. For the eleventh time in a row companies reduced their stock of pre-materials due to low capacity utilisation. Suppliers are still on short working hours. Average delivery times extended for the first time since August 2008, according to the BME.
The Markit/BME Purchasing Managers’ Index (PMI) is an early monthly indicator to predict the economic development in Germany. It is produced by Markit Economics, Henley-on-Thames, and is based on original survey data collected from a panel of over 500 purchasing managers and executives of the German manufacturing sector (selected by industry, size and region to represent the German economy). The German manufacturing index PMI is modeled towards the US Purchasing Managers’ Index (PMI).
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