What Happened to Germany’s Services PMI in July?



The Germany Services PMI in July

According to data provided by Markit Economics, the July Germany Services PMI (purchasing managers’ index) stood at 53.1, compared with 54.0 in June 2017, falling short of the preliminary market’s estimation of 53.5. This is the lowest figure we’ve seen since September 2016.

The services PMI included the following information:

  • Production output showed weaker improvement in July than in June 2017.
  • New business orders improved at a slower rate in July.
  • Employment slowed in July, and higher inventory costs affected total business activity.
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Performance of various ETFs in July

The iShares MSCI Germany ETF (EWG), which tracks performance in Germany, rose 1.4% in July 2017. The Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (HEDJ) (EZU) (IEV) economic performance, rose 2.8% during the same month.

The fall in the Germany Services PMI was mainly due to weaker export orders and higher inventory costs. In recent months, both Germany’s services and manufacturing PMIs had posted strong growth. The Ifo Business Climate Index had also been improving at a faster rate in prior months. However, over the last two months, slower domestic consumption has hampered the performance of Germany’s manufacturing and services PMIs.

In the next part of this series, we’ll analyze the France Services PMI for July 2017.


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