German manufacturing grows at slowest pace in 16 months in March

epa03692479 Engines are assembled in the car manufacturing plant of Mercedes-Benz Manufacturing Hungary Kft., an affiliate of Daimler AG of German carmaker Mercedes-Benz, during a journalists' tour in Kecskemet, 85 kms southeast of Budapest, Hungary, 08 May 2013.  EPA/SANDOR UJVARI HUNGARY OUT


German manufacturing grew at the slowest pace in 16 months in March, evidence that the economy is feeling the pressure of cooling global demand. Markit Economics said its Purchasing Managers Index slipped to 50.4 from 50.5 in February, just above the 50 level that separates expansion from contraction. While a separate report showed services improved this month, a gauge of new business across both sectors declined to the lowest in eight months.
“It looks as if momentum in the German economy will remain sluggish in the months ahead,” said Oliver Kolodseike, an economist at London-based Markit. The PMI results are “indicative of moderate, although unspectacular GDP growth, similar to the rates seen during the last two quarters.”
The Bundesbank said on Monday that Europe’s largest economy will probably maintain its “solid rate of expansion” this quarter, but there may be a slowdown in the next three months. It highlighted weak factory orders and a deterioration in business expectations.
The Ifo institute will publish its business confidence index for March at 10 a.m. Frankfurt time. The indicator is forecast by economists to rise to 106 from 105.7, which was the weakest reading in more than a year. Sentiment in Europe’s largest economy has suffered recently amid concern about slowing global growth and market volatility.

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