According to June PMI data from BME and IHS Markit, the German manufacturing sector is continuing to grow at the strongest rate in over six years. The PMI rose to 59.6 up from 59.5 in May, reaching a 74 month high.
The rising index reflected a large increase in new orders as well as a lengthening in supplier delivery times. German manufacturers experienced the fastest growth in new orders since March 2011, marking the sixth acceleration in seven months. Purchasing activity also rose sharply in June, placing higher demands on suppliers and leading to the greatest lengthening of delivery times since April 2011.
Average input costs continued to increase in June as a result of high prices for raw materials. However, while output inflation quickened to the second fastest rate since July 2011, the total inflation rate continued to decline to a 7 month low.
In total, the report highlights the current strength of the German manufacturing sector and suggests that manufacturing will continue to act as a positive force in second quarter German GDP.