S&P Global Market Intelligence: Germany’s Services Growth Slowed in October as Demand Recovery Remains Key

According to Jin10, Phil Smith, deputy director of economics at S&P Global Market Intelligence, said Germany’s services recovery faced headwinds in October, with the latest PMI survey showing weaker growth momentum as business demand eased slightly. A rebound in new services business during the third quarter appeared to support October activity as companies worked through backlogs and projects. However, demand may need to recover quickly for the sector to keep growing during the rest of the fourth quarter. The business expectations index rose to its highest level since February, suggesting the slowdown may be temporary, and surveyed companies remained optimistic about market conditions over the next year. As expected, inflation in services input and output prices declined after fuel discounts were reinstated in October, although price pressures remained high by historical standards. Companies also said high fuel prices, rising borrowing costs and wage increases were squeezing their operating margins.