December 04, 2024 at 08:55AM
Final Services PMI 49.3 vs. 49.4 expected and 51.6 prior.
Final Composite PMI 47.2 vs. 47.3 expected and 48.6 prior.
Key findings:
HCOB Germany Services PMI Business Activity Index at 49.3 (Oct: 51.6). 9-month low.
HCOB Germany Composite PMI Output Index at 47.2 (Oct: 48.6). 9-month low.
Further falls in new business and employment as price pressures spike higher
Comment:
Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said:
“Hopes that the service sector could keep the German economy afloat in the long run pretty much vanished in November.
After eight months of growth, the PMI for services dipped into negative territory. This means it can’t make up for the
recession in the industrial sector anymore, and the economy might stagnate or even contract in the fourth quarter.
Job cuts continued in November, though the pace of layoffs slowed a bit. Still, with all the headlines about job losses in the
industrial sector, we shouldn’t expect a recovery in the labour market anytime soon. On the bright side, a wave of layoffs in
the service sector isn’t likely either, since there is still a decent number of job openings in that part of the economy.
The high wage increases from the third quarter seem to have pushed up costs for service companies. They report that their
input prices rose more sharply than the previous month. Even though they managed to pass some of these costs onto
customers, it means inflation might not drop as quickly as people hoped.
Political uncertainty and issues in the manufacturing sector are seen by some service providers as reasons for weak
demand. This is reflected in a decline in order backlogs over the past seven months. New business also shrank slightly for
the third month in a row. We probably won’t see a pickup in demand until at least early summer, hopefully when there’s a
new government in Germany and some of the uncertainty has cleared up.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.
