2017.01.2404:35:00UTC+00Germany Private Sector Growth Eases To 4-Month Low

Germany's private sector growth slowed to a 4-month low in January despite strong expansion in manufacturing, flash survey results from IHS Markit revealed Tuesday.

The composite output index fell to 54.7 in January from 55.2 in December. However, any reading above 50 indicates expansion in the sector.

The flash services Purchasing Managers' Index also dropped to a 4-month low of 53.2 in January from 54.3 in December. Meanwhile, it was forecast to climb to 54.5.

On the other hand, the manufacturing PMI climbed to a 36-month high of 56.5 in January from 55.6 in December. In contrast, economists had expected the index to fall to 55.4.

Higher private sector output seen in January on solid increase in new business. Nonetheless, volumes of outstanding business rose only marginally.

The rate of job creation across the private sector was the second-quickest since September 2011.

On the price front, input prices rose at the sharpest pace in over five-and-a-half years, led by a particularly steep rise in manufacturers' costs. At the same time, the rate of charge inflation eased slightly.

"Looking ahead, German companies are increasingly optimistic. Both manufacturers and service providers anticipate healthy growth in 2017. IHS Markit expects economic growth to hold steady at 1.9% this year, matching the first official estimate of growth for 2016," Philip Leake, economist at IHS Markit said.