BERLIN (Reuters) – The slowdown in activity in Germany has deepened this month, according to a preliminary survey published on Friday, raising fears of a recession for Europe’s largest economy at the end of the year .
The preliminary composite PMI index compiled by S&P Global fell for the sixth consecutive month, falling from 47.8 in November to 46.7 in December, compared to 48.2 expected by economists.
An index below 50 indicates a contraction in activity.
“The latest PMI survey for Germany confirms our forecast that growth in the fourth quarter will be negative, as in the third,” notes Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.
The German economy contracted in the third quarter, and a technical recession is defined as two consecutive quarters of contraction.
Activity in the services sector fell for the third consecutive month, falling from 49.6 to 48.4 in December, compared to a consensus of 49.8.
“The services sector remains dominated by the risks of stagflation,” underlines Cyrus de la Rubia. Production contracted, while input prices increased.
The preliminary manufacturing PMI rose from 42.6 to 43.1 in November, slightly below analysts’ forecasts of 43.2. The new orders index continues to decline rapidly.
Inflationary pressures increased at the end of the fourth quarter as businesses reported the biggest rise in producer prices in seven months and rising costs.
(Written by Maria Martinez, Corentin Chappron, edited by Jean-Stéphane Brosse)
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