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The
HCOB German Flash Composite Purchasing Managers' Index (PMI),
compiled by S&P Global, fell for the sixth consecutive month,
declining to 46.7 in December from November's 47.8, below the
48.2 forecast by economists.
A reading below the 50 level points to a contraction in business
activity.
The composite PMI index tracks the services and manufacturing
sectors that together account for more than two-thirds of the
German economy.
"If you are on the hunt for gifts right now, you will not strike
gold in the latest PMI survey for Germany," said Cyrus de la
Rubia, chief economist at Hamburg Commercial Bank. "This
confirms our view of a second consecutive quarter of negative
growth by the year's close."
The German economy contracted in the third quarter of the year.
Two consecutive quarters of decline are defined as a technical
recession.
Business activity in the services sector fell for the third
consecutive month, to a reading of 48.4 in December from 49.6 in
the previous month, below analysts' forecast of 49.8.
"In the realm of services, the economic landscape is still
dominated by the gloomy hues of stagflation," de la Rubia said.
Output contracted, while input prices rose.
The manufacturing PMI rose to 43.1 from 42.6 in November,
slightly below analysts' expectations of 43.2 and still in
contraction territory. New orders continue to contract rapidly,
the survey showed.
Inflationary pressures meanwhile increased at the end of the
fourth quarter, with firms reporting the steepest rise in output
prices for seven months amid a more marked uptick in average
costs.
(Reporting by Maria Martinez; Editing by Susan Fenton)
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