World News

German private sector expansion holds steady in February: PMIs

BERLIN (Reuters) – Germany’s private sector expanded steadily in February as growth in services activity slowed but still made up for an easing recession in manufacturing, a business survey showed on Friday, although the coronavirus outbreak may pose a threat to future exports.

IHS Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, edged down to 51.1 from 51.2 the previous month.

The reading beat the consensus forecast in a Reuters poll of analysts who had expected a drop to 50.8.

A sub-index gauging activity in the services sector fell to a two-month low of 53.3 from 54.2 the previous month.

“The signs from the data are that domestic demand remained in good health, with service sector activity continuing to rise despite reports of lower tourist numbers,” said Phil Smith, principal economist at IHS Markit.

A sub-index tracking the manufacturing sector improved to 47.8 from 45.3 the previous month. The February reading was the highest since January 2019. Analysts had expected a drop.

“So far, disruption to manufacturing production from supply issues has been fairly limited, but these are still early days in what could potentially be a lengthy saga,” Smith said, referring to the coronavirus epidemic.

(Reporting by Michael Nienaber; Editing by Hugh Lawson)