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German manufacturers grow for 18 straight months

Published 04/01/2011, 03:55 AM
Updated 04/01/2011, 03:56 AM

* Final manufacturing PMI 60.9, unchanged from flash reading

* Job creation hits record high in survey's 15-year history * Only sporadic reports of supplier problems due to Japan

BERLIN, April 1 (Reuters) - Germany's manufacturing industry logged its 18th straight month of expansion in March even as growth slowed from the record high hit in February, a business survey showed on Friday.

Final readings compiled in Markit's purchasing managers index (PMI) showed job creation -- widely known to be a lagging indicator -- rose to the highest level seen in the 15 years of the survey.

The PMI reading matched last week's flash estimate of 60.9, down from February's all-time high of 62.7, but still significantly higher than the 50 threshold that separates expansion from contraction.

"March data indicated higher levels of purchasing and stocks of inputs, reflecting concerns about lengthening supplier delivery times as well as greater production requirements," Markit senior economist Tim Moore said in a statement.

"Strong global demand for raw materials was cited as the primary reason for supply chain delays, and only a small proportion of the survey panel cited the earthquake in Japan."

That said, Moore explained that the latest figures confirm an exceptionally strong performance during the entire first quarter for the sector, which contributes roughly one-fifth to overall German economic output.

Survey responses showed firms continued to boost their production capacity in response to steep improvements in order books stemming in particular from demand in China and the United states, prompting German manufacturers to increase their hiring to a record rate.

Markit said jobs growth was broad-based across the three market groups monitored by the survey, with investment goods producers reporting the fastest increase in workforce levels. (Reporting by Christiaan Hetzner; Editing by Hugh Lawson)

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