Berlin: Growth in German Private Sector Activities was evaporated in December as a limitation to divide the aggressive fourth wave of Koronavirus infection regarding the service sector in the largest economy in Europe, a survey showed on Thursday.
The Manager Index of Composite Composite Composite IHS Markit fell to 50.0, the lowest level of 18 months, from 52.2 in November.
This is weaker than Reuters analyst polls that have expected a decline to 51.1 in December.
Reading 50 marks the level of activity that has not changed, with any value above the signaling growth and below refers to contraction.
“The recovery of the German economy was stopped in his footsteps in December with a revival of pandemics, as a new restriction and an increase in uncertain activities in all the country’s services sectors,” said Markit Phil Smith economist.
PMI Flash for service activities fell to 48.4, a 10-month low, from 52.7 months earlier, showed a decline in sales among retailers in the crucial holiday season at the end of the year.
The industrial sector shows several signs of improvement after supply congestion for microchips and other medium-sized goods regarding factory output, especially among Germany German car makers.
Flash PMI for manufacturing rose to 57.9 from 57.4 in November.
“Every interference to supply the chain of the appearance of the Omicron variant seems to be limited so far,” Smith said.
But he warned that the impact of Omicron might not be filtered and the situation could change rapidly if more infections began to appear, especially in countries with the “zero covid” approach.
PMI survey data refers to the inflation rate in the input fee and the output costs subside slightly from the highest multi-year seen in November when the consumer price index which was harmonized by the EU reached 6% in Germany.
At the same time, business expectations enlighten, supported by expectations that the problem of supply chains and sidewalks related to pandemics in activities can fade over the coming year, Markit said.
The IFO Economic Institute said on Tuesday it expects the German economy to shrink 0.5% a quarter per quarter in the last three months of this year and stagnate in the first three months of next year.
Coupled with the overall price surge, Germany now faces several months of winter “stagflation”, or zero growth combined with extraordinarily high inflation.