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Germany Services PMI Is Falling: Can Investor Confidence Return?

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Germany Services PMI in April

According to data provided by Markit Economics, the final Markit Germany Services PMI (Purchasing Managers’ Index) showed a softer rise in April. It was 53 in April compared to 53.9 in March and didn’t meet the preliminary market estimate of 54.1. It was the weakest expansion in services activity since September 2016.

The Germany Services PMI for April was mainly due to the following:

  • Production output and volume witnessed a weaker improvement in April than in March.
  • Both new business orders and export orders rose at a slower rate in April.
  • However, employment in the services sector rose at a higher rate in April.
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Performances of various ETFs in April

The iShares MSCI Germany ETF (EWG), which tracks the performance of Germany’s equity market, improved 1.3% in April. The iShares MSCI Germany Small-Cap ETF (EWGS), which tracks the performance of Germany’s small-cap stocks, rose 0.55%.

Manufacturing activity in Germany also saw weaker improvement in April due to weaker client demand. Slower improvements in both manufacturing and services activities are signaling that investors are very concerned about Germany’s future economic outlook. Since Germany is the powerhouse of the Eurozone, slower economic activity there is raising concerns about the entire Eurozone economy.

In the next part of this series, we’ll analyze the performance of France’s Services PMI in April.

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