Services activity growth slows but still solid in Germany
Staff Writer |
Germany’s service sector remained in good health at the end of 2016, despite seeing growth of business activity ease slightly.
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New orders rose at a slower, yet still solid, pace amid reports of improving client demand. Outstanding business increased marginally for the second straight month, encouraging companies to raise their staffing levels further.
Meanwhile, a combination of rising raw material costs (notably fuel) and greater wages led to a sharp increase in input prices. Charges rose more quickly as a result.
The final seasonally adjusted Markit Germany Services PMI Business Activity Index posted 54.3 in December, down slightly from November’s 55.1 but still signalling robust growth.
The latest reading marked the end of a strong final quarter, during which the sector has recovered growth momentum following a notable slowdown in September. The quarterly average (54.5) was the highest since Q1 2016.
December’s rise in activity was widely attributed to new business gains. The final Markit Germany Composite Output Index – which measures the combined output of the manufacturing and service sectors – edged up to 55.2 in December, from 55.0 in November and an earlier flash estimate of 54.8.
After having posted 55.1 in October, the index has signalled the best quarter of private sector growth since Q2 2014. New orders at service providers showed a similar trend to output in December, with the rate of expansion edging down but remaining solid overall.
New business has risen continuously over the past two years. Some firms made particular reference to online orders, though most of those that saw growth commented on a general improvement in underlying demand.
Rising workloads encouraged a number of panellists to increase employment in the final month of the year. The rate of hiring was solid and broadly in line with the 2016 average. ■