- Prior 45.1
- Services PMI 46.4 vs 46.2 expected
- Prior 46.5
- Composite PMI 46.4 vs 44.9 expected
- Prior 45.1
The readings are an improvement relative to October but they still show a contraction in the German economy this month, albeit at a slower pace. Demand conditions continue to be impacted by strong inflation with manufacturers reporting another steep decline in new orders. A positive though is that labour market conditions continue to stay more robust. S&P Global notes that:
“November’s flash PMI survey doesn’t alter the narrative that Germany is likely heading for a recession, but it does offer some hope that the contraction in the economy will perhaps be shallower than first feared. The headline PMI surprised on the upside, coming in above consensus at 46.4 and signalling the slowest rate of decline in business activity for three months.
“Positively, data showed a reduction in the downward pressure on factory production, as manufacturers reported an improvement in material availability and an overall shortening of supplier delivery times for the first time in almost two-and-a-half years.
“Not to get too carried away, however, underlying demand continues to weaken rapidly, linked to sharp price increases and hesitancy among customers, with the downturn in service sector new business even gathering pace to the quickest since May 2020.
“The PMI survey shows that pipeline price pressures are moderating, with manufacturers reporting a sharp slowdown in the rate of input cost inflation to a near twoyear low in November. That said, not only are firms’ costs still rising much faster than normal, but it will take time for the softening of pipeline pressures to feed through to slower consumer price inflation .
“Business confidence has steadied somewhat, with a mild autumn having perhaps allayed concerns about gas shortages over the winter. That said, expectations have merely improved from ultra-low levels, meaning they are still rooted deeply in negative territory as firms continue to highlight concerns about the soaring cost of living, rising interest rates and still-high uncertainty.”