S&P GLOBAL MARKET INTELLIGENCE deputy chief economist Phil Smith said Germany’s
services-sector recovery lost momentum in October as business demand softened,
according to the latest PMI. Q3’s pickup in new-business inflows and existing
backlogs helped sustain October activity, but Smith warned that continued growth
through the rest of Q4 would likely require a swift rebound in demand. The
business expectations index rose to its highest since February, suggesting the
slowdown may be temporary. The reintroduction of an October fuel discount pushed
down input and output price inflation, but price pressures remain elevated by
historical standards. Firms also cited high fuel costs, rising borrowing costs
and wage growth as ongoing margin squeezes.
