German industry is growing vigorously – still. The industry is still booming: In October, the German purchasing managers’ index from the IHS Markit Institute recorded its highest level since March 2018. But the outlook is already gloomy.
German industry is growing vigorously – still
Despite the corona pandemic, German industry is doing well. The purchasing managers index climbed 1.8 to 58.2 points in October, announced the IHS Markit institute based on final data from its company survey. This puts the barometer at its highest level since March 2018 and well above the 50 mark, from which it signals growth. The companies recorded the strongest increase in orders since the survey began in 1996.
“Manufacturing continues to recover rapidly,” said Markit economist Phil Smith. “Less positive, and perhaps a sign that growth may slow down again soon, was the first slowdown in the business outlook in seven months.” With the rapidly increasing number of infections, the “risk of renewed disruption of supply and demand” also grows. For example, the consumption barometer published by the German Retail Association (HDE) fell again in November for the first time in six months – from 98.66 points in October to 98.01 points.
Record growth in the summer quarter
After the slump due to the corona crisis in spring, the German economy recovered noticeably and grew at a record pace in the summer quarter. The gross domestic product rose by 8.2 percent between July and September compared to the previous quarter. The growth was driven by higher private consumer spending, more investment in equipment and a sharp rise in exports. In the other large economies of the euro zone, such as France, Italy and Spain, the economy picked up again significantly in the summer quarter.
Despite the increased number of infections and the recently adopted lockdown measures, there was a further recovery in industry in the euro zone overall in October. Here the barometer climbed by 1.1 to 54.8 points at the beginning of the autumn quarter. “The euro zone industry really boomed in October,” said Markit chief economist Chris Williamson. “In fact, production and incoming orders have increased more than seldom in the last 20 years.”