Private Sector Growth in Germany Wind Down in March

German private sector growth slightly weakened for this month due to slackening performance of factory output as shown in a survey on Thursday, however, Germany was able to keep on track for a solid growth in Q1. The Markit’s flash composite Purchasing Managers’ Index (PMI), used to record the activities of manufacturing and services sector contributed more than two-thirds of the economy, showed a decline from 57.6 to 55.4. Hence, the general outlook from the Reuters poll of economists failed to meet as they expected a downturn to 57.0. But it remains higher than the 50 level that separates expansion from reduction.

IHS Markit’s Economist Chris Williamson stated that issues regarding the decisions of U.S. President Donald Trump brought confusions towards the predictions of exporters, particularly, imposing tariffs on steel and aluminum and the recent of the European currency. The sub-index for manufacturing had a dip to 58.4 which was the weakest growth reading since July 2017 versus 60.6 in February this year.

Also, services business activity had fallen in March alongside the decline of Markit’s sub-index from 55.3 last month to the current 54.2. The total high readings of the poll reflect for the possible resumption of uptrend for Europe’s biggest economy. Williamson further speculated that the growth rate for the first quarter would be 0.7 percent compared to the 0.6 percent growth in the fourth quarter of 2017.

On Wednesday, German panel of economic advisers lifted its growth forecast for this year to 2.3 percent but cautioned that protectionist policies would likely curb growth.