German services PMI beats forecasts, hits 6-month high in November

Final Germany Services PMI beats expectations, hits 55.1 in November compared to 54.2 in the prior month and better than forecasts at 55.0. German service providers extended another month of solid output growth, with the latest expansion hitting a six month high.

New business which continued to expand strongly was seen as the main driver behind the growth. Business outstanding also rose for the first time since June, encouraging companies to raise their workforce numbers further during the month.

Input costs in Germany’s service sector continued to rise in November causing the strongest rate of charge inflation in four-and-a-half years as service providers passed higher input prices on to their clients. Optimism was seen among German service providers regarding rise in output over the next 12 months.

The final Markit Germany Composite Output Index – which measures the combined output of the manufacturing and service sectors – posted 55.0 in November, little-changed from October’s 55.1 and indicative of solid growth of private sector output.

“Today’s survey results come as a reassurance that September’s near-stagnation of Germany’s service sector economy was only a temporary slowdown. The German economy therefore remains on track to meet IHS Markit’s forecast of 1.8% annual growth over 2016 as a whole.” said Oliver Kolodseike, Economist at IHS Markit.

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