Germany’s Private Sector Surprises with Unexpected Growth in April

In a surprise turn of events, Germany’s private sector unexpectedly returned to growth in April, according to a preliminary survey conducted by S&P Global. The HCOB German Flash Composite Purchasing Managers’ Index (PMI) rose to 50.5 this month from 47.7 in March, surpassing a Reuters poll forecast of 48.5. This marks the first reading above the 50 mark that indicates expansion in 10 months, with the composite PMI index tracking the services and manufacturing sectors that together account for more than two-thirds of the German economy.

The index for the service sector also saw a significant rise, reaching 53.3 this month from 50.1 in March, its highest level in 10 months. This suggests that the service sector may serve as a catalyst for the overall economy as it continues to recover from its slump during the pandemic. Meanwhile, manufacturing remained in contraction but at a slower rate than before, and confidence amongst goods producers reached its highest level in a year. The manufacturing PMI index rose to 42.2 from 41.9 in the previous month, although it was below the forecast of 42.8 in a Reuters poll