By Maria Martinez
BERLIN, Jan 23 (Reuters) – Germany’s private sector business activity grew at its fastest pace in three months in January, but the labour market saw its sharpest decline since mid-2020, a survey showed on Friday.
The HCOB preliminary German flash composite Purchasing Managers’ Index, compiled by S&P Global, rose to 52.5 in January from 51.3 in December, indicating growth as figures above 50 denote expansion.
The services sector led the growth with a PMI of 53.3, up from 52.7 in December, while manufacturing also rose to a three-month high of 48.7 from 47.0 the previous month.
“While there are signs of a modest recovery, services companies have trimmed their workforce significantly in January, which might point more to efficiency measures than to concerns about demand,” said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.
Despite the positive momentum in business activity, employment fell at the quickest rate since November 2009, excluding pandemic-related declines.
The manufacturing sector continued its trend of job cuts, and the services sector saw the fastest decrease in staffing levels in over five and a half years.
Input costs surged, marking the strongest inflation rate in almost three years, driven by higher wages and increased costs of energy, metals, and transport. This led to a notable rise in output prices, particularly in the services sector.
(Reporting by Maria Martinez; Editing by Toby Chopra)
