IHS Markit announces German business activity to have remained under pressure in December

According to the IHS Markit PMIs announced earlier today, German business activity remained under pressure in December. While the service sector noted a slight improvement as compared to November, the optimism was offset by the decline in the manufacturing sector. The report also highlighted the new orders sub-index to have sustained weakness that contributed to a higher reluctance for businesses in hiring new staff in December.

Prices Rose At The Lowest Rate In Over Three Years In December

IHS Markit also declared in its December report that the rise in prices for goods and services have marked the lowest rate in more than three years. The analysts construed the slowdown as a hint towards muted cost pressures and relatively softer demand.

The German composite PMI, however, was reported to have remained unchanged in December at 49.4. The flash services PMI for Germany was recorded at 51.7 in November. At 52.0 in December, the index highlighted a slight improvement in service sector business activity. On the other hand, the German flash manufacturing PMI was registered at 44.1 in November. As per the previous estimate, analysts had anticipated the figure to further improve to 44.6 in December. In contrast, according to IHS Markit data, the index dropped from November’s 44.1 that marked the highest in five months, to a significantly lower 43.4 in December.

The data also reported the new orders in the German private sector to have dropped for the sixth consecutive month in December. The drop, however, was accentuated as the least since July. The growth in the services sector also marked the first time in the previous fourth months while the drop in the manufacturing sector was printed the lowest since January.

Decline In New Export Orders And Services Eased In December

The decline in the new export orders and services were also seen to have eased in December. The outstanding business in Germany’s private sector, however, dropped sharply in December due to the insufficient availability of new projects to replace the completed ones.

In terms of employment, the services sector recorded easing in the rate of job creation in December. The figure, however, remained below the yearly average. On the manufacturing front, the decline in factory employment marked the second-fastest rate in the previous decade.

Against the expectations, however, the EUR/USD currency pair managed to keep its strength in the forex market following the IHS Market economic reports. Rising from a daily low of around 1.1120, the pair was seen trading as high as 1.1150. The gains were sufficiently sustainable with the pair currently settling around the daily high.