Growth of German services output picks up in August
Staff Writer |
The German service sector remained in expansion mode in August, according to the latest PMI survey data from IHS Markit.
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Moreover, rates of growth in both total business activity and new contracts picked up from ten-month lows in July.
Less positively, employment growth eased to a 16- month low and business expectations were the weakest in 2017 so far.
Price pressures strengthened to a five-month high in the latest survey.
The seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index remained above the no-change mark of 50.0 in August, signalling ongoing growth of output at German service providers.
The headline figure posted 53.5, up from July’s ten-month low of 53.1, signalling solid growth.
It was the first month-on-month increase in the index since March, and took it slightly above its long-run trend level of 53.2.
Activity has risen in every month since June 2013.
The seasonally adjusted final IHS Markit Germany Composite Output Index remained above the nochange mark of 50.0 in August, signalling ongoing growth of output at German private sector firms.
The headline figure posted 55.8, up from July’s tenmonth low of 54.7, signalling strong growth.
Manufacturing output rose at the third-fastest rate since January 2014.
By services sub-sector, growth of business activity was registered in Financial Intermediation, Renting & Business Activities and Transport & Storage, with marked increases seen in both Financial Intermediation and Transport & Storage.
In contrast, Post & Telecommunication, Hotels & Restaurants and Other Services all recorded further declines in activity.
New business received by German service providers increased in August, extending the current sequence of expansion to 32 months.
The rate of growth accelerated since July and was solid overall, albeit the second-weakest since January.
The level of outstanding work fell in August, following a two-month period of modest growth.
The rate of decline was only marginal, however, and higher backlogs were reported in the Financial Intermediation and Renting & Business Activities sectors.
German services employment increased for a survey-record forty-sixth successive month in August, linked to stronger demand.
The rate of growth in workforces weakened to a 16-month low, but remained strong overall.
Job creation was sharpest in the Transport & Storage sub-sector.
Cost pressures faced by German service providers sharpened slightly in August.
The rate of input price inflation accelerated to a five-month high and was stronger than the long-run survey average.
Similarly, prices charged by service providers increased at the fastest rate since March.
Service sector business expectations remained strongly positive in August, despite moderating further from May’s recent peak to an eight-month low.
Firms linked positive sentiment to new services, new customers and improving consumer confidence. ■