Business activity rose across Germany’s private sector for the second month running and at a slightly quicker rate in February.
The latest HCOB ‘flash’ PMI survey showed that sustained steady growth of services business activity midway through the first quarter coincided with a reduced drag from falling manufacturing production, which recorded the slowest decline for nine months.
Employment in the eurozone’s largest economy meanwhile showed a modest fall as job losses in the goods-producing sector offset rising workforce numbers at services firms.
On the price front, rates of inflation in both input costs and output prices ticked down slightly from the recent highs seen in January.
The dichotomy between price rises in the service sector and discounting in manufacturing continued. Trends in business expectations were more consistent across the two monitored sectors, however, with February seeing a broad-based softening of optimism from the month before.
The HCOB Flash Germany Composite PMI Output Index came in at 51.0 in February, up from 50.5 in January and the highest reading for nine months. The modest rate of growth was driven by a sustained upturn in the services sector, where business activity has now risen for three successive months.
The rate of services expansion was moderate, however, and eased slightly from the previous month (index at 52.2). Whilst manufacturing continued to weigh on the performance of the private sector, its drag on overall growth eased as factory production recorded its slowest rate of contraction since May last year (index at 48.5).