German manufacturing PMI falls to 51.3 in September

Manufacturing activity in Germany expanded at a slower rate than expected in September, but activity in the services sector grew at the fastest pace in seven-months, preliminary data showed on Monday.

In a report, market research group Markit said that its preliminary German manufacturing purchasing managers’ index fell to a seasonally adjusted 51.3 in September from a final reading of 51.8 in August.

Analysts had expected the index to inch up to 52.2 this month.

A reading above 50.0 on the index indicates industry expansion, below indicates contraction.

Meanwhile, the report showed that service sector activity in Germany improved more-than-expected in September, hitting a seven-month high.

The preliminary services purchasing managers’ index rose to a seasonally adjusted 54.4 this month from a reading of 52.8 in August. Analysts had expected the index to ease up to 51.8.

Commenting on the report, Tim Moore, Senior Economist at Markit said, “Germany’s economy remained firmly in recovery mode during September, and its strengthening performance should continue to reverberate across the euro area.” 

Following the release of the data, the euro was modestly higher against the U.S. dollar, with EUR/USD inching up 0.09% to trade at 1.3534.

Meanwhile, European stock markets were lower after the open. The EURO STOXX 50 shed 0.4%, France’s CAC 40 dipped 0.15%, London’s FTSE 100 slumped 0.3%, while Germany's DAX edged 0.3% lower.