Business Activity in German Services Sector Weakened Last Month
Rising cost pressures and waning business optimism has slowed growth in the private sector of Europe's largest economy to a near four-year low. German services PMI fell to 53.3 in November from 54.7 in October, with business optimism in the sector falling to the lowest level in two years.
Meanwhile, IHS Markit's final composite Purchasing Managers' Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, dropped to 52.3 in November from 53.4 in October.
The German economy contracted for the first time since 2015 in the third quarter. Gross domestic product (GDP) in Europe's biggest economy contracted by 0.2% quarter-on-quarter in Q3, compared with a forecast for a contraction of 0.1%. On an annual basis, the German economy grew by 1.1% in the third quarter, while analysts had expected 1.3% gain.
The Germany’s government predicts gross domestic product growth of 1.8% in 2018 and 2019. This would be below the calendar-adjusted 2.5% growth reached last year, which was the strongest growth rate since 2011.