Germany Keeps Solid Pace of Growth as Services Strengthen

A measure of German economic growth held near a 10-month high in November as an acceleration in services activity largely offset a slowdown in manufacturing.

A Purchasing Managers’ Index for manufacturing and services fell to 54.9 from 55.1 in October, IHS Markit said on Wednesday. While that’s the weakest reading in two months, it’s still well above the 50 mark that divides expansion from contraction.

“Although the PMI failed to further build on October’s 10-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape,” said Oliver Kolodseike, an economist at IHS Markit. “The survey data also signal that a healthy labor market remains one of the mainstays of Germany’s economic upturn.”

The Bundesbank said this week that German economic growth will likely pick up considerably in the last three months of the year after a temporary slowdown in the third quarter. The fortunes of Europe’s biggest economy are key to the recovery of the euro region, where expansion is stuck at mediocre levels and global risks are building.

Germany’s services PMI rose to 55 in November from 54.2, reaching a six-month high. While a gauge for manufacturing fell to 54.4 from 55, companies signaled a sharp increase in new export orders during the month, according to Markit.

A composite PMI for France released earlier on Wednesday showed the economic recovery there is gathering pace. Figures for the euro area are set to be published at 10 a.m. Frankfurt time.

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