Services sparkle, but for Germany’s manufacturers it’s murkier: PMI

FILE PHOTO: A construction site is reflected on a skyscraper facade in Berlin, Germany, May 30, 2018. REUTERS/Axel Schmidt

BERLIN, May 6 (Reuters) – Germany’s service-sector boom continued in April, creating jobs at the fastest rate in over a decade and offsetting a deteriorating climate in the manufacturing sector, purchasing manager data from research firm Markit showed on Monday.

Continuing last month’s trend, the Germany Service PMI index rose to 55.7 from 55.4 in March, its highest reading since September, led by strong growth in the post and telecoms sector.

Service providers were hiring at their fastest rate since October 2007, with numbers nearing their highest since data was first collected 22 years ago, with rising wages feeding through into both input cost and sales price inflation.

“At 55.7, the headline business activity index has edged further above its long-run trend level and isn’t too far off the highs in 2018,” said Markit’s Principal Economist Phil Smith.

Only the transport and storage services sectors showed a decrease in activity, reflecting the manufacturing weakness that is dragging on Markit’s Germany Composite Output index.

Coming in at 52.2, that reading was one of the lowest seen in six years, though it was nonetheless up on the previous month’s 51.4, thanks to the strong services performance.