Germany May flash companies PMI 53.9 vs. 53.5 anticipated

• Services PMI 53.9 vs. 53.5 expected and 53.2 prior.
• Manufacturing PMI 45.4 vs. 43.1 expected and 42.5 prior.
• Composite PMI 52.2 vs. 51.0 expected and 50.6 prior.

Key Findings:

• HCOB Flash Germany Composite PMI Output Index(1) at 52.2 (Apr: 50.6). 12-month high.
• HCOB Flash Germany Services PMI Business Activity Index(2) at 53.9 (Apr: 53.2). 11-month high.
• HCOB Flash Germany Manufacturing PMI Output Index(4) at 48.9 (Apr: 45.4). 13-month high.
• HCOB Flash Germany Manufacturing PMI(3) at 45.4 (Apr: 42.5). 4-month high.

Comment:

Commenting on the flash PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:

“These numbers offer hope. 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.”