Economic Buzz: German Services PMI Down To 46.1 In November

5 Dec 2022 , 02:41 PM

The decline in German service sector business activity extended into November, with soaring prices and heightened market uncertainty continuing to weigh on demand, latest PMI survey data from S&P Global showed. Rates of both input cost and output charge inflation continued to run at some of the highest levels on record despite ticking down from the previous month. Businesses maintained a negative outlook for activity in the coming year, although expectations did improve for a second consecutive month. The seasonally adjusted headline S&P Global Germany Services PMI Business Activity Index came in at 46.1 in November. The index has now registered below the 50.0 threshold that separates growth from contraction for five months in a row. Down from Octobers 46.5, the latest reading signaled a slight acceleration in the rate of decline. The sustained downturn in business activity coincided with reports from surveyed firms of weaker underlying demand and an associated drop in inflows of new work. An increase in staffing capacity across the service sector in November helped to alleviate capacity pressures and, thereby, contributed to the reduction in backlogs of work. On the price front, Novembers survey showed sustained strong inflationary pressures across Germanys service sector. Similarly, November saw a further sharp, albeit slower, rise in average prices charged by services firms as they looked to pass on part of the burden of higher costs to customers. The S&P Global Germany Composite PMI Output Index registered 46.3 in November, staying below the neutral 50.0 threshold to signal a further fall in business activity across the countrys private sector. However, up from Octobers 45.1, the latest reading indicated a slower rate of contraction. Total employment growth was unchanged from the modest pace seen in October. Turning to prices, latest data showed further steep, albeit slower, rises in both input costs and output charges. Business expectations remained pessimistic but improved further from Septembers recent low. Powered by Commodity Insights