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German private sector grows at slowest pace in 17 months in November: PMI
[BERLIN] Germany's private sector grew at the slowest pace in 17 months in November as new business and output prices fell, a survey showed on Wednesday, pointing to a meagre expansion in Europe's largest economy in the fourth quarter.
Markit's final composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors that account for more than two-thirds of the economy, fell to 51.7 in November from 53.9 in October.
That was still above the 50 line dividing growth from contraction but down from an initial reading of 52.1 for November, far below levels seen earlier in the year.
The PMI index tracking services alone fell to 52.1, a 16-month low, from 54.4 in October, although the index tracking future business expectations among service providers rose.
"Composite PMI data suggest the German economy is likely to face another quarter of only marginal growth at best, with fears of a renewed downturn intensifying," Markit economist Oliver Kolodseike said. He also noted that the average PMI reading for the fourth quarter so far is the lowest since the second quarter of 2013.
Service sector activity showed that a recent upturn was "starting to lose its legs", he said, as output growth slowed and new business rose only marginally amid concerns of a weakening domestic economy and political instability abroad.
Some improvement in business expectations, however, suggested companies are planning on boosting investment in 2015.
The German economy barely avoided falling into recession in the third quarter, registering growth of 0.1 per cent after a contraction of 0.1 per cent in the April-June period.
But record employment levels, rising wages and low interest rates are helping prop up the economy, which has been hurt by the West's confrontation with Russia over Ukraine and weakness in some eurozone partners.
Berlin has cut its growth forecasts for this year and next to 1.2 per cent and 1.3 per cent, respectively, blaming modest global growth and international crises.