Germany’s private sector lost momentum in November as manufacturing unexpectedly slipped back into contraction and the services sector grew more slowly than anticipated, according to a survey released Friday.
The HCOB flash composite Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 52.1 in November from 53.9 in October — a two-month low.
Even so, November marks the sixth consecutive month that the index has remained above the 50-point threshold, indicating continued, although weaker, growth across services and manufacturing. Together, these sectors make up over two-thirds of the euro zone’s largest economy.
Manufacturing weakened further. The sector’s PMI dropped to 48.4 from 49.6, missing expectations for a slight increase to 49.8. New manufacturing orders declined sharply, driven in large part by the fastest fall in export sales since January. This drop in demand led to shrinking work backlogs and a modest rise in job cuts.
The services sector also slowed. The services PMI slipped to 52.7 from 54.6 — another two-month low — and came in below forecasts for 54.0.
“These figures are a major setback for Germany,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. He noted that manufacturing is signaling further weakness, while earlier hopes for faster growth in services have faded.
Overall, de la Rubia said the German economy is “limping toward marginal growth” in the fourth quarter.
Germany’s finance ministry said on Thursday that only a moderate recovery is likely by year-end. Still, manufacturers remained cautiously optimistic, supported by expectations for stronger demand in defence and civil engineering, driven by government investment.
