German service sector sees slight loss of growth momentum in November
Staff Writer |
Germany’s service sector saw its slowest rise in business activity for three months in November, but still enjoyed a solid growth performance overall, according to the latest PMI survey data from IHS Markit.
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Businesses in the sector continued to take on new staff amid sustained pressure on capacity, and they also showed strong pricing power by raising charges at one of the fastest rates seen over the past nine years.
However, confidence towards the outlook for activity faltered and was close to August’s eight-month low.
The seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index came in at 54.3 in November, down slightly from 54.7 in October (as well as the earlier ‘flash’ estimate of 54.9) and signalling the slowest pace of growth for three months.
Still, the average for the fourth quarter so far remained above that recorded in the three months to September.
A sharp and accelerated increase in manufacturing output – the fastest seen in over six-and-a-half years – helped to offset the slower rise in services business activity.
The final IHS Markit Germany Composite Output Index registered 57.3, up from October’s 56.6 (but below the ‘flash’ estimate of 57.6).
Growth of services business activity continued to be led by the Financial Intermediation sector, with Transport & Storage and Other Services – which includes health, education and other personal services – also posting strong performances.
Hotels & Restaurants was the only monitored segment to see a contraction in output.
IHS Markit Germany Composite PMI German service providers recorded another robust increase in incoming new business in November.
Nonetheless, the pace of expansion eased for the first time in four months, down from October’s 20- month high.
A similar trend was observed for service sector employment, the level of which increased for the forty-ninth month in a row but at a slightly slower rate than that shown by the survey during the month before.
Factory job creation meanwhile gathered pace, propelling composite employment growth to its second-highest since March 2011.
One of the factors driving businesses to take on new staff was sustained pressure on capacity.
Backlogs in the service sector rose for the fifth time in the past six months in November, with the rate of accumulation accelerating to the fastest since January 2016.
Meanwhile, thanks to a backdrop of robust demand, businesses were able to protect margins from rising costs by hiking prices charged for services.
Furthermore, having picked up for the third month running, the rate of inflation in output charges was just below March’s recent peak and among the fastest recorded over the past nine years. ■