German PMIs beat expectations in May

Markit’s flash composite purchasing managers’ index for Germany rose to a five-month high of 54.7 in May from 53.6 in April, beating economists’ expectations for a reading of 53.8.

The manufacturing PMI increased to a five-month high of 52.4 from 51.8, surpassing expectations of 52.0.

Meanwhile, the services PMI edged up to a three-month high of 55.2 from 54.5 in April, ahead of estimates of 54.6.

Markit economist Oliver Kolodseike said: “A first look at today’s survey results is encouraging, as output growth accelerated for the first time in 2016 so far.

“However, we should not be too complacent about these numbers and should instead view them with some caution. There was evidence that some companies raised activity levels in order to process backlogged work, rather than as a result of rising new business. Although new order intakes continued to increase, the rate of growth was the weakest in ten months, with occasional mentions from panellists of an increasingly challenging demand environment.”