Strong Exports Lifted German Factory Activity to a 3-Year High in February

Today’s survey showed that increased demand from China, the United States and Europe pushed the growth of factory activity in Germany to the highest level in more than three years in February, improving expectations for Europe’s largest economy.

The final reading of the IHS Market PMI for the manufacturing sector, which accounts for a fifth of the economy, jumped to 60.7 from 57.1 in January.

This is the highest reading since January 2018 and slightly better than the initial reading of 60.6.

The wheel of work in factories took place during the pandemic thanks to increased demand from abroad, which helped to avoid a contraction in the last quarter of 2020 and compensate for lower consumer spending amid a partial shutdown to contain Covid-19.

A large number of manufacturers said that there is higher demand from Asia, especially China, as well as from the United States and Europe, and export sales recorded the largest increase since December 2017, according to the survey.

But economists still expect the economy to contract in Q1 of the year due to tighter isolation measures that have closed most shops and services since mid-December and very low temperatures that slowed construction activities in February.