German Growth Momentum Rebounds After First-Quarter Slowdown
(Bloomberg) -- Growth in Europe’s largest economy unexpectedly picked up in April, reversing a slowdown at the start of the year.
A Purchasing Managers’ Index for manufacturing and services rose to 55.3 from 55.1, IHS Markit said on Monday. Economists surveyed by Bloomberg predicted the measure would drop to 54.8.
“Growth of Germany’s private sector steadied in April, to arrest the loss of momentum seen in February and March,” said Phil Smith, principal economist at IHS Markit. “However, a further slowdown in new-order growth to its weakest for over a year-and-a-half does raise some concerns.”
Germany’s export-oriented economy is particularly vulnerable to any risks for global trade, even though policy makers have stressed that the immediate impact of a spat between the U.S. and China over import tariffs will probably be small.
IHS Markit said data point to a “solid start” to the second quarter, with growth rates in both manufacturing output and services picking up slightly. Employment increased at a faster pace.
Signs of economic stabilization in Germany and the wider euro area will be welcomed by policy makers in the region who convene this week to discuss the next steps in gradually pulling back monetary support. The European Central Bank currently stimulates the economy by buying some 30 billion euros ($37 billion) worth of bonds a month, but is expected to wind down that program by the end of the year.
A similar gauge for France also showed an improvement in private-sector growth. A measure for the euro area will be published at 10 a.m. Frankfurt time.
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