German economy accelerates in December

Germany´s economy is growing at its fastest rate for more than 6-1/2 years, a survey suggested on Thursday.

Markit's flash German composite Purchasing Managers' Index (PMI), a gauge of activity in both the manufacturing and services sectors, jumped to 58.7 in December from 57.3 in the prior month.

While marking an 80-month high, it also significantly exceeded consensus forecasts, which had suggested December would see a slight ease in the composite gauge.

Tellingly, the manufacturing subindex surged to a record high in the month, with the flash German manufacturing PMI coming in at 63.3 in December versus 62.5 in November.

Political worries

The strong German economic performance comes despite domestic political worries, with Angela Merkel having failed to form a coalition in the aftermath of September´s federal elections.

“December’s flash PMI survey results are the icing on the cake for what has been a strong year for the German economy. Growth has been robust throughout 2017, and the pace of expansion has kicked even higher in the last two months to take it to a level not seen since early-2011,” said Phil Smith, principal economist at IHS Markit.