Germany's service sector saw only modest growth in business activity in October, latest PMI data from IHS Markit showed, with the performance among the weakest seen over the past six years amid an ongoing slump in demand.
The pace of job creation meanwhile eased further from the highs seen earlier in the year as firms' expectations for future activity turned negative for the first time since late-2012.
The headline seasonally adjusted IHS Markit Germany Services PMI Business Activity Index registered 51.6 in October.
This was up slightly from September's three-year low of 51.4 (and above the preliminary 'flash' estimate of 51.2), but still one of the weakest readings seen since the current upturn began in mid-2013.
The consumer-focused 'Other Services' sub-sector was the best-performing area for business activity growth, followed closely by Financial Intermediation.
The only broad category to see an outright contraction was Transport and Storage.
The modest overall rise in business activity in October belied a second straight monthly decrease in new orders.
Panellists attributed the ongoing weakness in demand to a backdrop of uncertainty, which has led clients to exercise greater caution.
Data meanwhile pointed to a further marked decrease in new work from abroad during the month.
With inflows of new business remaining in decline, there was an increasing reliance on backlogs of work to support business activity growth.
Indeed, the amount of outstanding business across the service sector fell for the third month in a row and at the fastest rate for almost five years.
Evidence of easing capacity pressures was reflected in a further slowdown in the rate of job creation across the service sector in October.
Though remaining above the historical average (beginning in 1996), the rate of employment growth was the weakest since May 2018 and below the average over the current six-year upturn in services payroll numbers.
Another factor weighing on hiring across the service sector in October was a reduction in firms' expectations towards future activity.
For the first time in almost seven years, the number of businesses expecting activity to fall over the next 12 months exceeded those predicting growth.
Anecdotal evidence highlighted growing concerns about the economy.
Elsewhere, latest data showed a strengthening of cost pressures across the service sector at the start of the fourth quarter.
Input price inflation ticked up to a six-month high and moved further above the long-run average.
Principal upward pressure on costs came from wages, fuel and energy prices, according to panel member reports.
Service providers raised their charges accordingly, with the pace of inflation little-changed from the solid rate seen in September. ■