Forex Pros – Manufacturing activity in Germany rose unexpectedly in February, advancing to a record high, preliminary data showed on Monday.
In a report, market research group Markit said that its preliminary German manufacturing purchasing managers index rose to a seasonally adjusted 62.6 in February, compared to 60.5 in January, whose figure was revised up from 60.2.
Analysts had expected the index to decline to 60.3 in February.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
The report also said that service sector activity in Germany fell more-than-expected in February, dropping to a two-month low.
The preliminary services purchasing manager’s index fell to a seasonally adjusted 59.5 in February, down from 60.3 in January, whose figure was revised up from 60.0.
Analysts had expected the index to decline to 60.0 in February.
According to the data, manufacturers and service providers both recorded steep accelerations in prices charged inflation. The former registered the most marked rise in factory gate charges since the VAT-affected series-record high posted in January 2007.
Commenting on the report, Tim Moore, economist at Markit said, “Germany appears on track for a steep upturn in GDP growth during the first quarter, led by manufacturing but also helped by the strengthening service sector recovery and a weather-related catch up in construction output.”
He added, “Surging fuel and raw material prices continued to push up input cost inflation in the German private sector. Manufacturers were especially hard hit in February, with the rate of inflation at a new survey-record high”.
Following the release of the data, the euro eased up against the U.S. dollar, with EUR/USD adding 0.01% to hit 1.3695.
Meanwhile, European stock markets were mixed. The EURO STOXX 50 shed 0.18%, France’s CAC 40 edged lower 0.02%, the FTSE 100 was up 0.13% and Germany’s DAX climbed 0.07%.
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