German PMI in line as strong services offsets weak manufacturing

Economic activity in Germany continued on a positive plane in March, with the strong services sector counterbalancing a the manufacturing industry's lowest rise in output since November 2014.

A purchasing managers' index (PMI) survey from Markit/BME for the services sector came in at 55.5, beating consensus forecasts of 55.0 and up slightly from the 55.3 a month before. A reading above 50 indicates expansion.

German manufacturing PMI for March produced a reading of 50.4, down very slightly on last month's 50.5 and also short of the 50.8 consensus estimate.

The composite output index was therefore unchanged at 54.1, in line with the consensus.

Markit said the amount of new business received by private sector firms in Germany increased at the weakest rate in eight months during March, with slower growth recorded at both manufacturers and service providers.

Some of those firms surveyed commented on declining demand from international clients, with specific mentions of Asia and the US, with manufacturers reporting a stagnation of new export orders after a seven-month sequence of expansion.

Employment levels remained in growth mode, although the rate of job creation slowed for the third month running and was the weakest in nearly a year.