German services lose momentum as catch-up effects weaken and supply shortages spill over: PMI

Berlin-Germany’s services sector continued to grow strongly in September, but COVID-19’s recovery from the pandemic gained momentum as more companies were affected by supply bottlenecks as the catch-up effect weakened. I lost it.

IHS Markit’s Services Division Final Purchasing Managers Index (PMI) fell from 60.8 in August to 56.2. This is well above the 50 threshold that separates growth and shrinkage, which is a bit better than the 56.0 flash read.

Phil Smith, an economist at IHS Markit, said the survey suggests that Germany is heading for a more modest period of economic growth in the last few months of the year.

“Current forecasts are for GDP to increase 3.0% quarter-on-quarter and 1.2% in the fourth quarter,” Smith said.

The German economy contracted 2.0% quarter-on-quarter in the first three months of the year and then expanded 1.6% quarter-on-quarter in the three months from April to June.

The composite PMI index, which consists of both the services and manufacturing sectors, fell from 60.0 in August to 55.5, reflecting the continued recovery of the manufacturing sector. The reading was better than the 55.3 flash diagram.

“As activity approaches pre-pandemic levels, the loss of momentum is partly natural,” said Smith, who said that growth resistance due to material shortages became more pronounced, directly to service companies and in the manufacturing industry. He added that he was influencing through deceleration.

Inflationary pressure, coupled with further spillover threats to other parts of the economy, has weakened service providers’ growth expectations, Smith said.