BERLIN (Reuters) – The downturn in German economic activity eased in November, a preliminary survey showed on Wednesday, as firms saw price pressures retreat from recent highs, offering hope that an expected recession could be milder than first feared.

S&P Global’s flash composite Purchasing Managers’ Index (PMI), which tracks both the manufacturing and services sectors which together account for more than two-thirds of Germany’s economy, rose to 46.4 in November from 45.1 in October.

A Reuters poll of analysts had pointed to a reading of 44.9.

November marks the fifth month in a row that the reading fell below the 50 mark that separates growth from contraction.

“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,” said Phil Smith, economics associate director at S&P Global Market Intelligence.

While improvements in material availability and an overall shortening of supplier delivery times are positive developments, said Smith, “underlying demand continues to weaken rapidly, linked to sharp price increases and hesitancy among customers.”

Separately, the manufacturing index rose to 46.7 from a final reading of 45.1 in October. The consensus forecast was for 45.0.

The services index dipped slightly to 46.4 from a final reading of 46.5 in October. The consensus forecast was for 46.2.

(Reporting by Miranda Murray and Paul Carrel; Editing by Toby Chopra)

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