Germany PMI Manufacturing ticked down to 57.6 in November, from 57.8, but beat expectation of 56.7. That’s nonetheless the lowest level in 10 months. PMI services rose slightly to 53.4, up from 52.4, above expectation of 51.5. PMI Composite rose to 52.8, up from 52.0.
Lewis Cooper, Economist at IHS Markit said:
“The flash PMI data for November point to a general levelling off the economic growth slowdown seen across the German private sector over the previous three months. Business activity continued to rise, with the rate of increase gaining some well needed momentum as manufacturers and services firms alike saw faster uplifts in output.
“Supply delays continued to weigh heavily on the performance of the German economy, however, with inflows of new work rising at a slower pace as clients held off on ordering due to delays. Export orders showed a more resilient trend, but nonetheless, overall new work increased at the weakest rate since February.
“Material shortages, combined with greater energy and wage bills, price hikes at suppliers and logistical issues led to an unprecedented rate of cost inflation in November, with German companies subsequently raising their own charges to a record degree. This subsequently knocked on to business confidence in November, with sentiment the lowest for over a year as many firms cited concerns around the pandemic, supply problems and price pressures.
“Overall, the flash PMI data point to a slightly improved trend for business activity, but supply delays and inflationary pressures remain a key cause for concern and are likely to weigh further on growth in the coming months, especially if these constraints further stifle demand.”
Eurozone PMI manufacturing rose slightly to 58.6, services rose to 56.6
Eurozone PMI Manufacturing rose slightly to 58.6 in November, up from 58.3, above expectation of 57.2. PMI Services rose to 56.6, up from 54.6, above expectation of 53.6.
Chris Williamson, Chief Business Economist at IHS Markit said:
“A stronger expansion of business activity in November defied economists’ expectations of a slowdown, but is unlikely to prevent the eurozone from suffering slower growth in the fourth quarter, especially as rising virus cases look set to cause renewed disruptions to the economy in December.
“The manufacturing sector remains hamstrung by supply delays, restricting production growth to one of the lowest rates seen since the first lockdowns of 2020. The service sector’s improved performance may meanwhile prove frustratingly short-lived if new virus fighting restrictions need to be imposed. The travel and recreation sector has already seen growth deteriorate sharply since the summer.
“With supply delays remaining close to record highs and energy prices spiking higher, upward pressure on prices has meanwhile intensified far above anything previously witnessed by the surveys.
“Not surprisingly, given the mix of supply delays, soaring costs and renewed COVID-19 worries, business optimism has sunk to the lowest since January, adding to near-term downside risks for the eurozone economy.”
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