BERLIN (Reuters) - Growth in Germany’s private sector lost a little steam in March as factory output slowed, a survey showed on Thursday, but Europe’s biggest economy remains on track for a solid expansion in the first quarter.
Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, fell to 55.4 from 57.6 the previous month.
That undershot the consensus forecast in a Reuters poll of economists, who had expected a dip to 57.0. But it was still well above the 50 mark that separates growth from contraction.
IHS Markit economist Chris Williamson said concerns about U.S. President Donald Trump’s decision to impose import tariffs on steel and aluminium as well as the recent appreciation of the euro were clouding the outlook for exporters.
The sub-index for manufacturing fell to 58.4, the lowest growth reading since July 2017, from 60.6 the previous month.
Services business activity also decreased in March, with Markit’s sub-index for the sector falling to 54.2 from 55.3 in February.
The overall high readings of the survey suggested that Germany’s upswing is likely to continue.
“We’ll probably see a strong first quarter with a growth rate of around 0.7 percent,” Williamson said. This compares with a growth rate of 0.6 percent on the quarter in the last three months of 2017.
The panel of economic advisers to the German government on Wednesday raised its 2018 growth forecast to 2.3 percent but warned that protectionist measures could limit the upswing.