Preliminary May services PMI 53.9 vs 53.2 in April (Il Sole 24 Ore Radiocor) - London , 23 May - Germany's purchasing managers' index for the manufacturing sector in May rose to a four-month high of 45.4 from 42.5 in Apri, while that for the services sector increased to an 11-month high of 53.9, up from 53.2 in April, according to preliminary data released by S&P Global and the Hamburg Commercial Bank.

The manufacturing PMI output index rose to 48.9 from 45.4 in April, a 13-month high.

The composite PMI output index, a weighted average of manufacturing output and services PMI, was at a 12-month high of 52.2 against 50.6 the earlier month.

A reading below 50 signals contracting sector activity, while one above an expansion.

"These numbers offer hope," commented Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. "The manufacturing output index has reached its highest level in 13 months in May, while the recovery in the services sector has gained momentum. Consequently, the composite PMI now signals solid growth. Our GDP Nowcast estimates a 0.3% GDP increase in the second quarter compared to the first quarter.

'This could be the turnaround in the manufacturing sector, as the output index has made a significant move towards expansionary territory. It's also encouraging that the index for new orders has made a substantial leap forward, driven by export orders. It seems likely that production will start growing again within two or three months.

'While the increase in the headline manufacturing PMI is positive, the accelerated downsizing of purchased and final goods stocks slightly dampens the outlook. However, this could indicate that companies were caught off guard by better-than-expected demand and had to rely more heavily on their existing inventory.

'Those predicting a prolonged weakness in the German economy might be proven wrong soon. The service sector, in particular, showed robust growth in May, expanding for three consecutive months. There's more reason for optimism as it's not just output that's improving, but also new business and demand from abroad, which includes tourism. Additionally, companies are increasingly bullish about future activity, underlined by the much more solid hiring pace.".

AAA-Hob

(RADIOCOR) 23-05-24 09:43:49 (0230) 5 NNNN