Germany’s Rising Manufacturing Signals a Stronger Path Ahead

Germany’s final manufacturing PMI in September

According to a report by Markit Economics, Germany’s final manufacturing PMI stood at 60.60 in September 2017, compared to 59.30 in August. The PMI figure beat preliminary market expectations of 60.

Germany’s Rising Manufacturing Signals a Stronger Path Ahead

The strong performance in Germany’s manufacturing PMI was mainly due to the following factors.

  • Production volume and output rose at a faster rate in September 2017.
  • New business orders and export orders performed stronger in September 2017.
  • Employment rose at a faster pace in September 2017.

Performance of various ETFs in September

The iShares MSCI Germany ETF (EWG), which tracks the performance of Germany’s performance, rose 3.5% in September 2017. The Vanguard FTSE Europe ETF (VGK), which tracks Europe’s (HEDJ)(EZU)(IEV) economic performance, also rose 3.2% in September 2017.

Germany’s manufacturing PMI recorded a stronger improvement in September 2017—the biggest expansion in the last five years. The rising business climate suggests that the domestic economy is improving at a stronger rate. As Germany is the powerhouse of the Eurozone, stronger economic activity in the country is a positive factor for the Eurozone also.

In the next part of this series, we’ll analyze the final manufacturing PMI for Spain in September 2017.