German services sector growth hits 6-month high in Sept – PMI

Growth in Germany’s services sector accelerated to a six-month high in September, boosting overall private sector growth and giving Europe’s largest economy momentum going into the fourth quarter, a survey showed on Wednesday.

Markit’s final composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, rose to 57.7 – its highest reading in almost 6-1/2 years – from 55.8 in August.

The robust reading, which was well above the 50 line that separates growth from contraction and just below a preliminary estimate of 57.8, reflected the services strength and a pick up in manufacturing output growth to its fastest since early 2011.

In the services sector, an index of business activity rose to 55.6 from 53.5 in August, with business expectations firming to their strongest since May.

“Services order books were filled at the fastest rate for six months and firms’ confidence towards future growth prospects also perked up, suggesting that the economy carries good momentum into the final few months of the year,” said Phil Smith, principal economist at IHS Markit.

Service providers also hired new staff, with the pace of job creation accelerating slightly though below higher rates seen earlier in the year.

The survey reinforces the positive outlook for the economy.

Late last month, economic institutes hiked their growth forecasts to 1.9 percent this year and 2 percent next year, while also saying Germany would have record budget surpluses over the next two years.
Source: Reuters (Writing by Paul Carrel; Editing by Hugh Lawson)

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