(RTTNews) - Germany’s services activity grew in October, continuing the trend that began in August, a survey by Markit Economics said Wednesday. However, the growth was slower than in the previous month.

The headline seasonally adjusted Business Activity Index stood at 50.7 in October, lower than the flash estimate of 50.9 and 52.1 in September. A reading above 50 indicates expansion, while a reading below 50 signals a contraction.

There was a further rise in new orders, and sentiments regarding prospects for activity growth in the next 12 months also improved. This in turn contributed to a stabilization of service sector employment levels.

Meanwhile, the composite output index, which measures private sector activity and includes manufacturing and services activity, decreased to 52.3 in October from 52.4 in September. The index remained in expansion for the third consecutive month, and was only slightly lower than the flash reading of 52.6.

“The latest overall rise in private sector output was driven by a solid increase in manufacturing production, which largely offset weaker growth in the service economy”, Markit said.

New orders in the private sector showed the strongest rise in one-and-half years, with the service sector’s expansion standing at a 15-month high. Price discounting continued to support sales, but the output prices recorded the slowest drop from the beginning of this year. Input costs were mostly unchanged, after falling for 11 consecutive months.

“Weaker growth in the service sector weighed on the German economy in October, offsetting the momentum gained in the manufacturing sector. With new business volumes at service providers rising only marginally and activity growth the slowest for three months, the latest data will add to concerns of a bumpy recovery path ahead”, Tim Moore, economist at Markit said.

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Posted in Categories: Economy, Eurozone, Releases.

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