GERMAN DATA
Turnover in German services sectors (excl. finance and insurance) weakened further in December, coming in at -0.6% M/M (vs -0.4% prior). On a yearly comparison, turnover is still up, however, at +0.4% Y/Y (vs +0.4% prior).
- Those figures, which are reported by Destatis in real (inflation adjusted) and seasonally adjusted terms, represent the fourth monthly decline in a row. The 3M/3M measure came in at -1.5% (vs -0.8% prior), the third decline after 6 consecutive positive prints.
- Furthermore, looking at the index level, a downtrend appears to be forming (see the chart below).
- In spite of this weakness through the end of 2023, as a whole, the year printed an all-time high and +2.0% Y/Y (real, but not seasonally- and calendar-adjusted).
- Services had been relatively resilient compared to the manufacturing sector in Germany, but the weakness which started to emerge at the beginning of autumn last year seems to continue with survey data showing little enouragement.
- Activity implied by the German Services PMI has remained in contractionary territory since December, coming in at 48.3 in February (47.7 Jan, 49.3 Dec). The latest release cited "tight financial conditions, client uncertainty and associated weakness in the wider economy (particularly the manufacturing and construction sectors)", with the new business category printing a contraction for the eighth consecutive month. The IFO services subbalance also printed in contractionary territory since mid-2023 (-4.1 Feb, -4.8 Jan).
- Note that services ex financial and insurance accounts for roughly 2/3 of German GVA.
MNI, Destatis
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