Sunday, March 26, 2023

COVID-19 lockdown hurts Germany’s services sector: PMI By Reuters


© Reuters. FILE PHOTO: General view shows restaurant of hotel castle Elmau in Kruen

BERLIN (Reuters) – German service sector activity has contracted faster this month after restrictive measures were introduced to tame a second wave of COVID-19 infections, a survey showed on Monday.

IHS Markit’s flash services Purchasing Managers’ Index (PMI) fell to 46.2 from 49.5 in October, sliding further below the 50 mark that separates growth from contraction and marking a second straight month of decline. A Reuters poll had predicted a drop to 46.3.

The survey also showed that activity in the manufacturing sector continued to grow, albeit at a slightly slower pace, offering support to an economy otherwise forecast to post its deepest recession this year since World War Two.

Activity in the factory sector eased to a still-healthy 57.9 from 58.2 in October, beating a forecast for a drop to 56.5.

“The resilience being exhibited by the manufacturing sector, which the survey shows is benefiting for growing sales to Asia in particular, supports our view that any downturn in the final quarter is expected to be far shallower than those seen in the first half of the year,” said IHS Markit’s Associate Director Phil Smith.

“The positive news surrounding the development of COVID vaccines has helped lift the spirits among German businesses, many of which are now hoping for a return to normality over the next 12 months,” he added.

“This looks to have been a supportive factor in the latest employment figures, which show factory jobs numbers moving closer to stabilisation and services payrolls edging higher.”

Germany introduced a “lockdown light” on Nov. 2 to contain the spread of COVID-19.

IHS Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, edged down to 52.0 from 55.0 in October.

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